loan payments – Informare Wissen Und Koennen Tue, 15 Mar 2022 08:18:17 +0000 en-US hourly 1 loan payments – Informare Wissen Und Koennen 32 32 Navient student loans have moved to Aidvantage. But when are payments due? Fri, 11 Mar 2022 23:57:06 +0000

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Federal student loan repayments have remained suspended for nearly two years since the pandemic began. Meanwhile, Naivent, formerly one of the largest student loan servicing companies in the United States, shifted its workload of 5.6 million student loans to Maximus, a global administrator of government programs. Maximus is a federal student loan servicer and services former Navient student loans under the name Aidvantage.

If you have federal student loans, they remain suspended until May 1, 2022 — meaning there are no mandatory payments, accrued interest, or loan collections until then. The Biden administration is also considering another expansion of the federal student loan break.

That said, if you haven’t logged into your federal student loan account recently, you might have questions, especially if your loan officer has changed. Here’s everything you need to know about removing Navient and how to log into your Aidvantage account.

Why did Navient exit the student loan business?

Navient has long been under fire from the Consumer Financial Protection Bureau, which sued the loan manager in 2017, saying the company pushed borrowers into expensive and risky private loans that they would be unable to repay. In January, Navient canceled $1.7 billion in private student loans for nearly 66,000 borrowers after coming under scrutiny for engaging in abusive and deceptive practices, including targeting students whose company knew they could not repay their loans.

In 2020, the U.S. Department of Education announced loan servicing changes in an effort to modernize the federal student loan system. As part of the Next Gen initiative, the Department of Education expanded its partnership with five of the current 10 loan servicers, who would continue to service federal student loans, but under stricter government regulations. Navient, along with FedLoan and Granite State, have elected to end their participation in the federal student loan service at the end of 2021.

Michael Lux, student loan expert, attorney and founder of The Student Loan Sherpa, said “increased federal regulation and government scrutiny of federal loan servicing is almost certainly to blame for Navient’s departure.” .

What does Navient’s departure mean for borrowers?

If your loans were managed by Navient, here’s what you need to know:

1. Aidvantage is your new loan manager

By now you should have been notified of this change by post or email from Navient, Aidvantage and the Department of Education. If you did not receive a notification, you should log into your existing Navient account and double-check your contact information to make sure it is correct. Even if your address was outdated, you should be able to log in to your new account.

2. You can login to your Aidvantage account with your Navient credentials

If you try to log into Navient, you will find a balance of $0 – this balance simply indicates that your loans have been purchased by Aidvantage. To log in to your new account, go to and enter your Navient login information.

The process is almost identical to that of Navient. Once you have entered your username and password, you will be prompted to enter your social security number or account number and date of birth to confirm your identity. From there, you will be taken to the Aidvantage account homepage, which looks like the Navient homepage, down to the left navigation options.

If you don’t remember your login information, select “Forgot User ID” or “Forgot Password” and confirm a personal challenge question to receive a new one by email. If you still cannot enter or you no longer have access to the registered email, contact Aidvantage for assistance at 800-722-1300.

3. Your repayment preferences must be the same

Any payment terms you have set up with Navient (auto-pay, deferral, income-based repayment plans) should have been seamlessly transferred to Aidvantage. Of course, since federal student loan payments have been suspended for more than 20 months, you may need to revisit the payment details, especially as you approach the end of the forbearance. And, if your work situation has changed since you last looked at your loan repayment options, you can apply for income-contingent repayment or other repayment options through Aidvantage now, so you’re good to go. when repayment begins in May 2022.

So, after logging into Aidvantage, you should find that your preferred payment method and automatic payment selection have been transferred, along with payment history and a record of fully repaid loans.

4. Prepare for repayment in 2022

Currently, federal student loan repayment is on pause until May 2022. However, this the refund freeze could be extended.

If you haven’t repaid your loans during the forbearance period, be sure to review your payment options now so you’re ready to go in May. Check your payment method, make sure you know your minimum monthly payment, and explore repayment options if you need further assistance. If you would like to explore other deferral or forbearance options, you can do so through your online account under “Refund Options”. You can also speak directly to Aidvantage at 800-722-1300.


Does Navient become Aidvantage?

No. In late 2021, Navient shifted its $5.6 billion student loan workload to Maximus, another federal student loan contractor. Maximus operates its student loan service as Aidvantage.

Will I receive tax documents from Navient or Aidvantage?

If Aidvantage is your new student loan provider, you will be able to download the 1098-E tax form, which shows the amount of interest you paid on your student loan, by going to the left panel and selecting “Tax Statements”.

Your old tax slips should have been imported from Navient to Aidvantage. For example, I was able to view my 2020 and 2021 tax documents through Aidvantage. Logging into Navient only allowed me to access my 2020 tax documents.

Should I prepare for repayment now or wait to see if loan forgiveness is accepted?

If you are trying to follow student loan cancellation policies, here is a brief summary. This week, the Department of Education identified 100,000 borrowers with a combined total of $6.2 billion in student loan debt who are eligible for debt cancellation, due to changes to the program. cancellation of civil service loans last October.

That said, only a small number of student loan holders are currently eligible for loan forgiveness. Although the refund break may be extended, it is a good idea to make a plan to prepare for the refund now, just in case. You can explore income-based repayment plans and other repayment options through your Aidvantage account.

The 9 fastest ways to pay off student loans, according to experts Thu, 10 Mar 2022 21:55:44 +0000

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Your student loans can eat up a big chunk of your budget each month, especially when you’re starting out on your own, making it that much harder to save for a home, build up your retirement savings, and pursue other financial goals. . It’s also not uncommon to still be saddled with student loan debt well into your thirties or beyond.

Learn: 10 ways to pay off your student loans in a year
Also: Women and student loan debt by the numbers: Why it matters to experts

You may have had a bit of a break from your loan repayments over the past two years when the federal government suspended student loan payments and interest due to tough financial times. But payments are expected to resume on May 1, 2022, so now is the perfect time to prepare.

If you’re doing well financially, now might be a good time to come up with a plan to pay off your student loans even faster. Taking advantage of special programs, breaks, and strategies could save you thousands of dollars in interest and years off your student loans. To make it happen, consider the following steps – straight from the experts.

Reassess your repayment options

This is a good time to analyze your numbers through’s student loan repayment simulator to learn your repayment options and terms based on your loan balance and income. You can use this tool to learn about income-contingent repayment plans, which can lower your monthly payments based on your income and also extend the term of your loan.

You can also learn about options to pay off your loans faster. Choosing the repayment plan with the highest monthly payment you can afford will pay off all loans faster and save you the most money on interest, said Mark Kantrowitz, financial aid expert and author of “How To to appeal for more university financial aid”. .” Just make sure the amount fits your budget without falling into other more expensive types of debt.

See: When is it time to talk to a financial advisor about student loans?

Sign up for automatic payment

When your monthly loan payments are automatically transferred from your bank account to the lender, you make the payments without having the option of spending the money on anything else. Your lender can also lower your interest rate by 0.25% to 0.50% if you sign up for autopay, Kantrowitz said. It can also help psychologically, when you don’t have to think about those payments every month. Contact your lender to register.

Add extra money to your loans at the highest rates

Make a list of all your student loans, their terms and their interest rates. Pay extra for your highest rate loans whenever you can, either by increasing your monthly payments or adding a lump sum each time you get extra money, like a tax refund or a premium.

“Let the lender know that this is an additional payment and not an advance payment of the next installment,” Kantrowitz said.

You can use the student loan repayment simulator to see the impact that increasing your payment or adding a lump sum can have on the repayment date and the total amount paid with interest. Consider taking extra money out of your budget to increase your payments for several months. This might mean foregoing some short-term expenses to get out of your student loans faster, but it will help you find yourself in better financial shape in the long run. After paying off the first loan, use some of the extra money to increase your monthly payments until the next loan on your list.

Make payments while you’re still in school

If you have a subsidized federal student loan, the government pays interest on the loan while you’re in school and for a six-month grace period afterward. If you have an unsubsidized loan, interest will accrue while you study, even though you are not yet required to make any payments. Either way, making payments while you study, even a small amount, can make a difference in the long run.

“Even if students and families only pay loan interest, in-school payments will make payments more manageable after the student leaves school and help reduce the total cost of the loan,” said Connor Peoples, spokesperson for Sallie Mae. Some lenders, like Sallie Mae, offer discounts to students and families who choose to make payments in school.

Related: 2 Key Ways Student Debt Burdens Are Taking Women’s Freedom Away

Refinance at a lower interest rate if advantageous

You might be able to lower your rate and pay off your loans faster with refinancing, but you might be locked into a higher monthly payment that could become difficult to pay if your income changes, and you might not be eligible for part of it. revenues. options for loan repayment or cancellation in the future depending on how you refinance.

“The lowest fixed interest rates on a private refinance will imply a shorter repayment term, as short as five years,” Kantrowitz said. “The monthly loan payment will be higher despite the lower interest rate, due to the shorter repayment term, and your debt will be paid off sooner.” However, if the new rate is higher than most of the interest rates on your current loans, it may be best not to refinance and accelerate the repayment of the loan at the higher rate, he said.

He also said to be careful before refinancing federal loans into a private student loan. “It will only save money if the borrower has excellent credit or if the federal loans are from several years ago when interest rates were higher,” he said. If you refinance federal loans into private loans, you may lose some special benefits of federal loans, such as longer deferrals and forbearances, income-based repayment, payment pause and interest relief, and student loan forgiveness options, he said.

“Be aware of what you’re giving up when you leave the federal system,” said Roger Young, director of thought leadership at T. Rowe Price, who recently conducted a study comparing student loan repayment options.

Check Out: 4 of the Best Student Loan Refinance Companies

Take advantage of the Employer Student Loan Repayment Assistance Program (RRAP)

About 8% of employers offered these programs in 2019, according to a study by the Society for Human Resource Management. “The number is likely higher now because Congress passed legislation to make LRAPs tax-exempt until December 31, 2025,” Kantrowitz said. “Employers can provide up to $5,250 a year in student loan repayment assistance. A typical LRAP provides $100 per month for an employee’s student loans. »

Reassessing Civil Service Loan Forgiveness

If you work for a federal, state, local, or tribal government agency or qualifying nonprofit organization, you may qualify for the Civil Service Loan Forgiveness Program on your federal student loans, which forgives the remaining balance on your loans after making 120 qualifying monthly payments. . It was notoriously difficult to qualify for this program in the past, but on October 6, 2021, the U.S. Department of Education announced a temporary period during which borrowers can receive credit for certain past repayment periods that otherwise would not. not eligible. See its public loan forgiveness page for more information.

Make the Most of Student Loan Tax Breaks

When determining how much you can afford to pay each month for your loans, keep in mind that you could get some money back at tax time. For 2021 and 2022, you can deduct up to $2,500 in interest paid on qualifying student loans. The deduction amount is phased out if your adjusted gross income was $140,000 to $170,000 if you are married and filing jointly in 2021 ($145,000 to $175,000 in 2022) and $70,000 to $85,000 for single filers and head of household. Married taxpayers filing separately cannot take advantage of the deduction, said Mark Luscombe, principal analyst at Wolters Kluwer Tax & Accounting.

The interest deduction can only be claimed if the taxpayer has a legal obligation to pay the interest, which may be the parents or the student, he said. A dependent on another person’s tax return cannot claim the deduction. To be a qualified loan, the loan must be taken out only for qualified higher education expenses, such as tuition, fees, room and board, books, supplies and equipment, a-t -he declares.

Integrate your student loan repayment into your overall financial plans

While paying off your student loans early can help you save money in interest in the long run, be careful not to jeopardize other parts of your finances. Student loan rates tend to be lower than other types of debt, like credit card debt, so you want to avoid getting into a situation where you’re paying so much for your student loans that you end up with higher interest rate debt if your income changes. or you have unexpected expenses. “Before you speed up your student loan repayments, build or increase your emergency fund,” Kantrowitz said.

Also, remember to continue contributing to any 401(k) or other retirement plans you may have at work, especially if you have employer matching and other savings opportunities. fiscally advantageous. Take a step back and think about how you will juggle all of these financial priorities.

“You potentially have several choices of things you can do when you have a little extra cash,” Young said. “The risk-free one is paying off debts of different types. There’s also putting more into retirement or putting it into a health savings account. There are a number of things you can do, but there’s something good about paying off your debt sooner.

More from GOBankingRates

This article originally appeared on The 9 fastest ways to pay off student loans, according to experts

How to pay off student loans in 10 years or less Wed, 09 Mar 2022 19:40:36 +0000

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Several strategies can help you pay off your student loans in as little as a decade. (Shutterstock)

It can feel like it will take you a lifetime to pay off your student loans, especially if you have a six figure student loan balance. But several repayment options can help you pay off your student loans in 10 years or less.

Getting rid of student loan debt early in your working life can help you save on interest and free up money for other financial goals, like saving for retirement, buying a home, or taking a vacation. dream.

If you’re ready to refinance your student loans, visit Credible for compare student loan refinance rates from multiple lenders in minutes.

How to pay off student loans in 10 years

If your goal is to get out of debt as quickly as possible, consider the following options that will help you pay off your student loans in 10 years.

Sign up for the Standard Refund Plan

The Standard Repayment Plan is the default repayment plan for federal student loans – it is designed to help borrowers repay their student loans up to 10 years. You are eligible for this repayment plan if you have the following types of federal loans under the Direct Loans Program or the Federal Family Education Loans (FFEL) program:

  • Subsidized direct loans
  • Direct unsubsidized loans
  • Direct Consolidation Loans
  • Direct Loans PLUS
  • Unsubsidized and Subsidized Federal Stafford Loans
  • FFEL PLUS loans
  • FFEL consolidation loans

Once you graduate and your federal student loan repayment period begins, you can choose a repayment plan. If you do not choose a plan, you will automatically be enrolled in the Standard Refund Plan.

If you have private student loans, there is no standard repayment term. These terms generally range from five to 20 years, depending on the lender.


Is the standard repayment plan right for you?

The answer to this question depends on your personal budget. A major advantage of this plan is that it has fixed monthly payments, which can be easier to budget for. Plus, choosing the 10-year repayment plan over a longer repayment term could help you save money on interest and get out of debt faster.

But the downside of the standard repayment plan is that your student loan repayments can be high, depending on your loan balance.

If the standard repayment plan monthly payment doesn’t fit your budget, you might be better off choosing a more affordable repayment plan. And if you can’t afford your monthly payment at all, consider asking adjournment or by contacting your loan officer to make payment arrangements.

Explore Student Loan Forgiveness

If you have a federal loan, you may be eligible for a student loan forgiveness program. To qualify, you usually have to work for a government or non-profit organization and make a set amount of payments. Two of the most popular student loan forgiveness programs are civil service loan forgiveness and teacher loan forgiveness.

Cancellation of civil service loans

The Public Service Loan Forgiveness (PSLF) is a federal program that provides student loan forgiveness to borrowers who work full-time in the nonprofit or government sector. To qualify, you must have a direct loan or consolidate your federal loans into a direct loan and make payments under an IDR plan.

You must make 120 qualifying student loan payments. As long as you make these payments consecutively, this option can get you out of debt in 10 years. Thereafter, any remaining loan balance will be forgiven to you.

Teacher loan forgiveness

The Teacher Loan Forgiveness Program is a federal program that provides student loan forgiveness of up to $17,500 on subsidized and unsubsidized direct loans and subsidized and unsubsidized federal Stafford loans to full-time teachers. With this limit in place, this program may not get you out of debt entirely, but it can go a long way in helping you get out of debt.

To qualify for this program, you must be a teacher who has worked in a low-income area for five full, consecutive years at an elementary school, high school, or educational services agency. After those five years, you may be eligible for loan forgiveness.

You must also meet the following requirements:

  • You have a bachelor’s degree.
  • You have been fully certified to teach in your state.
  • You have not been waived from licensing or certification requirements.
  • The loans for which you are requesting forgiveness were granted before the end of your five years of qualifying teaching service.

To find out if your workplace is eligible, see the Directory of low-income teachers.


Make additional payments

Another way to pay off your student loans sooner is to make an extra payment. If you make payments every two weeks, you’ll make one extra payment per year, which could help you save on interest. Even if you can’t afford to make a single extra payment, every dollar counts when tackling student debt.

For example, let’s say you have a $50,000 student loan with a loan term of 10 years, an interest rate of 6.8% and monthly payments of $575. If you pay $40 more per month, you’ll save $1,864 in interest and pay off your loan almost a year sooner. To get an estimate of how much you could save, use a student loan repayment calculator.

Here are three things you can do to free up some extra money to spend on your payments:

  • Make a budget. To determine if you can afford to make additional payments, create a budget. You can create one in Excel or by using pen and paper. Make a list of all your expenses and income. Next, look at your budget to see if there are any places you can cut costs.
  • Get a side scramble. If you like meeting new people and have a car, you can drive for a carpool company on nights and weekends. Do you like to write? Consider applying for a freelance writing gig.
  • Find a roommate. Your housing cost is probably your biggest expense. If you have an extra bedroom in your house or apartment, consider finding a roommate. If your housing cost is $1,200 per month, you can save $600 per month by splitting it in half.

With Credible, you can compare student loan refinance rates from various lenders, all in one place.

Ways to manage costs when you can’t pay off student loans in 10 years

If you simply can’t pay off your student loans in 10 years, consider the following options to make your payments more manageable.

Use an income-driven repayment plan

An income-contingent repayment (IDR) plan bases your monthly student loan payment on your income and family size. The Department of Education offers four IDR plans for eligible federal borrowers. Although the repayment periods for these plans are much longer than the standard 10-year repayment plan, they can be a good option if they make your payments more affordable. Additionally, once your repayment period has elapsed under each plan, any remaining loan balance will be forfeited.

The four IDR plans are:

  • Pay As You Earn Reimbursement Plan (PAYE plan) — The repayment period of the PAYE plan is 20 years. Your monthly payment is usually 10% of your Discretionary Income.
  • Revised Pay As You Earn Reimbursement Plan (REPAYE Plan) — With this repayment plan, your repayment term is 20 years if repaying undergraduate loans and 25 years if repaying graduate loans. As with the PAYE plan, your monthly payment is usually 10% of your Discretionary Income.
  • Income Based Reimbursement Scheme (IBR Scheme) — This repayment plan lasts for 20 years if you had no outstanding balance on a direct loan or FFEL program loan when you took out a direct loan on or after July 1, 2014. The repayment period is 25 years if you had a loan balance at that time. . Your monthly payment is usually 10% of your Discretionary Income if you are a new borrower or 15% if you are not a new borrower.
  • Income Contingent Repayment Plan (ICR Plan) — The ICR Plan lasts 25 years. To qualify, you must have an eligible direct loan. Your monthly payment is the lesser of 20% of your Discretionary Income or what you would pay on a repayment plan with a 12-year fixed payment.

Refinance in the shorter term

When you refinance your student loans, you take out a private loan to pay off your existing federal or private student loan(s), or both. If you have a good credit score and a solid income, you may qualify for an interest rate that is lower than your current rate. So if you’re making more money now than when you took out your student loans, or if your credit score has since improved, refinancing can get you a much better interest rate. If your credit score isn’t great, you may need a co-signer to help you get the best rates.

By refinancing for a shorter term, you’ll pay off your student loans faster (even if it still takes 10+ years) and save a lot of money in interest over the life of your loan.

For example, simply refinancing a 20-year loan to a 15-year loan could save you $12,880 in interest, even if your interest rate doesn’t change. Although your monthly payment is $68 more, you will end up paying less for your student loan overall and be debt free sooner.

But before you refinance federal student loans into a private loan, keep in mind that doing so will cause you to lose federal benefits, like loan forgiveness or forbearance. On the other hand, if you only have private student loans, refinancing may be the best option for you.

Credible allows you compare student loan refinance rates from multiple lenders without affecting your credit.

Types of personal loans | The bank rate Tue, 08 Mar 2022 22:19:25 +0000

If you want to use a personal loan to overcome a financial difficulty or consolidate your debts, you are not alone. According to research by Bankrate, the average consumer had personal loan debt of around $16,458 in 2020. Before you go ahead with borrowing the funds you need, you need to compare loan types available.

What is a personal loan?

A personal loan is a borrowing product available from a bank, credit union, or online lender. It is commonly used to cover a financial emergency, make home improvements, or consolidate debt. Most personal loans are disbursed in a lump sum and payable in installments over a specified period, usually between one and seven years.

Expect to pay between 4-36% interest, depending on your creditworthiness and the loan product you select.

Types of personal loans

There are an assortment of personal loan options to choose from, and you’ll get a variable or fixed interest rate.

Secured Personal Loans

Secured personal loans require you to put up an asset that acts as collateral. For example, you can take out a loan on your vehicle, which is called a title loan.

While this might be an ideal option if you have a lower credit score and assets to put up as collateral, there is a downside. If you are behind on loan payments, the lender could seize your property and sell it to recover what is owed to them.

Unsecured Personal Loans

These loan products do not require collateral to be approved. Plus, you’ll have quick access to funds without putting your assets at risk.

Unsecured personal loans are best for borrowers with good or excellent credit. However, you will generally pay more interest than a secured personal loan since the lender assumes more risk.

Debt consolidation loans

Debt consolidation loans are commonly used to pay off outstanding balances faster by saving on interest. Borrowers also benefit from streamlining the repayment process.

The idea is to get a loan with a lower interest rate than what you are currently paying on the debts you plan to consolidate. You will use the loan proceeds to eliminate these balances and make payments on a new loan product for a specified period. Ideally, you’ll save hundreds or even thousands of dollars in interest and get out of debt faster.

A debt consolidation loan can be risky if you use it to pay off credit card balances and don’t refrain from swiping cards once you clear the balances. You could end up with more debt than you started with.

Co-signed and joint loans

If you are unable to qualify for a personal loan on your own, the lender may approve you with a co-signer. This person should have a strong credit history and be willing to take responsibility for the remaining balance if you are unable to repay the loan. However, the co-signer will not have access to the loan proceeds.

Some lenders also offer joint loans, which allows both borrowers to access the funds. As with co-signed loans, both parties will be responsible for loan repayments. Your co-borrower will need good or excellent credit to boost your chances of getting loan approval.

Fixed rate loans

Fixed rate loans come with an interest rate that does not vary over the repayment term. Therefore, the borrower makes the same monthly payment for the duration of the loan.

Most personal loans fall into this category. It’s easier to build loan repayments into your spending plan because it won’t change over time.

Variable rate loans

Variable rate loans have a variable interest rate. Over time, your monthly payment could go up or down if the benchmark rate set by the banks changes.

Although it’s difficult to budget for payments on variable rate loans, the rates are sometimes lower than what you’ll get with a fixed rate loan. Thus, you should only consider this type of personal loan if you only need to borrow funds for a short period.

Personal line of credit

A personal line of credit works like a loan and you will have access to a pool of funds that you can borrow whenever you need it. Unlike personal loans, which require you to pay interest on the entire loan amount, you will only pay interest on the amount you withdraw.

This loan product is suitable for borrowers who want a safety net that can be used when needed.

Buy now, pay your loans later

Buy now, pay later Loans allow consumers to make a purchase without having to pay the full purchase price up front. Instead, the balance is divided and payable in equal, weekly or bi-weekly installments.

These loans are usually granted through mobile applications, such as Afterpay, Klarna and Affirm. You could get approved for a purchase now, repay a loan later with less than perfect credit if you demonstrate your ability to repay the loan. Most lenders will review your banking activity and may perform a soft credit check, which will not affect your credit score.

Types of personal loans to avoid

Some personal loans can mean bad news for your finances and should only be used as a last resort. Here are some options to avoid:

  • Credit card with cash advance: Some credit card issuers allow cardholders to take a cash advance from their available credit at an ATM or bank. But this benefit comes at a high cost – you’ll likely have to pay cash advance fees and a higher interest rate on the amount you borrow.
  • cash advance apps: These apps also give you quick access to cash, usually up to $250, until payday. Most charge a monthly fee to use this service, and you’ll have to pay back what you borrow on your next payday or within two weeks.
  • Payday loans: These loans are an expensive form of debt that caters to borrowers with poor credit. Payday loans usually come with high interest rates and are payable on payday. They often create a dangerous cycle of debt if you cannot repay and extend the term of the loan.
  • Pawnbrokers: If your local pawnshop offers loans, you can hand over your property in exchange for cash. You’ll likely pay exorbitant interest and the pawnbroker will keep your property if you don’t repay the loan.

How to choose the best type of personal loan for you

Ultimately, you want a loan product from a reputable lender that offers a competitive interest rate and monthly payments you can afford. It is equally important to consider the most appropriate options based on your creditworthiness, financial situation and intended use.

A personal loan could be a good choice if you need a fixed amount to make a specific purchase. But if you want the flexibility to borrow funds when you need them, a line of credit may be more ideal.

Use the Bankrate personal loan marketplace to explore your options and find a loan that meets your borrowing needs.

Learn more:

Student loans are due in 60 days. Are you ready? Tue, 01 Mar 2022 16:52:17 +0000

Student loans are due from 60 days.

Here’s what you need to know.

Student loans

Federal student loan repayments are expected to resume from 60 days. President Joe Biden extended temporary student loan relief through May 1, 2022, which was his third extension. Student borrowers should prepare now for the end of the student loan payment pause. Here’s how to prepare.

What does the end of student loan relief mean?

Temporary student loan relief from the Cares Act — the $2 trillion stimulus package Congress passed in March 2020 — has been extended five times by Biden and President Donald Trump. (Will student loan repayments be postponed until 2023?). When this student loan relief ends in 60 days, student borrowers will experience several changes, including:

  • federal student loan repayments will be due monthly;
  • interest on federal student loans will begin to accrue; and
  • student loans in default are subject to debt collection such as wage garnishment.

As of March 2020, student loan borrowers have not been required to make federal student loan payments, while interest rates on federal student loans are 0%.

What will be my new interest rate on my student loan?

When student loan payments resume, you may be wondering what your new student loan interest rate will be. If you have federal student loans, you most likely have a fixed interest rate. This means that your interest rate will remain the same for the duration of your student loan. Therefore, the interest rate you had before March 2020 will be the interest rate you had in May. If you have older federal student loans, you may have a variable interest rate. This means that your interest rate is subject to change during the term of your loan. Your new interest rate starting in May will be based on current market rates.

(What to do if you don’t qualify for student loan forgiveness)

Are private student loans impacted?

The restart of student loan repayments from May only affects federal student loans. Private student loans were not included in federal student loan relief. Therefore, you must continue to pay private student loans in the normal course.

(Do you qualify for $5 billion in student loan forgiveness?)

How does student loan relief affect repayment based on income?

During the Covid-19 pandemic, your income, family size, state of residence, or all three may have changed. If you are enrolled in an income-based repayment plan such as IBR, PAYE, REPAYE, or ICR, now is a good time to update this information with your student loan officer. These factors can impact your monthly payment for your federal student loans.

(Here are 6 major changes to student loan forgiveness)

What is the impact of student loan relief on student loan forgiveness?

The end of student loan relief does not mean the end of student loan forgiveness. During student loan relief, student borrowers were able to count federal student loan defaults as if they had made their student loan payments. For a student borrower seeking utility loan forgiveness, for example, that borrower can “count” nearly two years of nonpayment toward the 120 monthly payment requirement. While this benefit is ending, student borrowers can “count” more payments that were previously ineligible. Student loan borrowers must complete a limited waiver with the U.S. Department of Education to count past student loan payments toward public service loan forgiveness, which may help them get loans forgiven more quickly students. Since becoming president, Biden has forgiven more than $15 billion in student loans.

Should I Refinance Student Loans Now?

If you want a lower interest rate, a lower monthly payment, or both, refinancing a student loan can be a smart financial decision. You get federal and private student loan refinance as well as undergraduate and graduate student loans. When you refinance student loans, you can choose a fixed or variable interest rate and a student loan repayment term between 5 and 20 years.

This student loan refinance calculator shows you how much money you can save when you refinance student loans.

If you’re looking for student loan forgiveness, income-contingent repayment, or other federal benefits, you should only refinance private student loans. Why? When you refinance federal student loans, they become private student loans and will not be eligible for these federal programs. (Student loan refinance rates have gotten ridiculously cheap). That said, getting a lower interest rate on your federal student loans may make more sense financially for you depending on your particular situation. Only you can decide whether maintaining federal benefits or getting a lower interest rate is better for you financially.

Student Loans: Related Reading

Student loan refinance rates have gotten ridiculously low

3 ways to get student loan forgiveness now

Will student loan repayments be postponed until 2023?

If Biden cancels student loans, it will happen next

I am 64 years old and I took out a student loan to get an MBA, but no one wants to hire me, maybe because of my age. What to do with my student loans? Thu, 24 Feb 2022 16:42:00 +0000

Student debt

Getty Images/iStockphoto

Question: I need help with my student loan. I’m 64 and got my MBA in 2015, and I still can’t find a job. I have been to several interviews, but no one will hire me either because of my age or because I committed a crime at 27, even though he has since been acquitted and cleared. What can I do?

Have a question about getting out of a student loan or other debt?

To respond: The good news is that if you have federal student loans, you have several options. Although your federal loan payments will likely be suspended until May 1, 2022, when you need to start paying them back, you’ll want to make the payments manageable. So the pros recommend considering an income-driven repayment plan. “If your Discretionary Income is set at $0, your monthly payment could be set at $0,” says Rebecca Safier, Certified Student Loan Counselor and Higher Education Financing Expert at Student Loan Hero. (Note that if you have federal loans, refinancing is probably not a good option because it will strip the loans of federal protections like income-based repayment options.)

Not sure which income-tested plan to choose? “You can read through different income-oriented plans to see which option would suit you best, or you can just ask your loan officer to pick the one with the lowest monthly payment,” Safir says.

Another option is to request a deferral or forbearance once the federal student loan payment break is over. Both programs allow you to temporarily suspend your loan repayments due to financial hardship or other eligible reasons, but note that in most cases interest will accrue on your loans. (Learn more about deferment and forbearance here.) Although an income-driven repayment plan is preferable, opting for deferment or forbearance will not negatively impact your score. credit. But the pros say it’s not a long-term solution and the interest accumulation can be heavy.

Private student loans, unfortunately, are not eligible for these federal programs, but your loan officer might be able to work with you to adjust your payments or even temporarily suspend them. “It’s worth calling your repair person to discuss your situation and see if they can help you. You might also consider refinancing your private student loans, which could result in a better interest rate and new monthly terms,” says Safier. (See the best student loan refinance rates you can qualify for here.)

One thing to consider is that if you choose a longer term, your monthly payments might go down, but you’ll pay more interest. “If you don’t currently have any income, however, you’ll likely need to apply for a co-signer to qualify,” says Safier.

Bernie Sanders wants Biden to cancel all $1.8 trillion in student loans Wed, 23 Feb 2022 18:43:47 +0000

Senator Bernie Sanders wants President Joe Biden to cancel all student loan debt.

Here’s what you need to know.

Student loans

Bernie Sanders is back. After stepping out of the spotlight in the fight to cancel student loans, Sanders (I-VT) is now front and center. His most recent statement: Sanders is now asking Biden to forgive all $1.8 trillion in student loans, including private and federal student loans. This is the most ambitious proposal to cancel student loans because, if passed, it completely eliminate 100% of student debt for the 45 million student borrowers. Sanders proposed this legislation to Congress and made the complete cancellation of student loans a centerpiece of his presidential campaigns.

(Student loan cancellation reduced to $25,000).

Sanders would cancel more student loans than Elizabeth Warren

Sen. Elizabeth Warren (D-MA) has emerged as the U.S. Senate’s top champion for large-scale student loan forgiveness. (The student loan forgiveness could be the reason the Democrats lose the midterm elections). How does his plan compare to Sanders’ plan? Sanders would cancel all student debt. However, a proposal by Warren and Senate Majority Leader Chuck Schumer (D-NY) would forgive up to $50,000 in student loans. If passed, the Warren-Schumer plan would completely cancel student loans for 36 million student borrowers. However, there are limits to the Warren-Schumer plan. (Here’s Who Won’t Get Student Loan Forgiveness). For example, their plan would only apply to federal student loans. By contrast, Sanders’ plan for student loan forgiveness would include the cancellation of private and federal student loans. The Warren-Schumer plan would also limit student loan forgiveness to borrowers who earn up to $125,000 a year. In contrast, the Sanders plan would grant student loan forgiveness to every student borrower, regardless of income.

(Will student loan repayments be postponed until 2023?).

What the Sanders plan means for your student loans

What does the Sanders plan for student loan forgiveness mean for your student loans? (Here are 6 major changes to student loan forgiveness). Virtually, Congress will not pass the Sanders plan because there is virtually no support for large-scale student loan forgiveness of all student loan debt. Congress also won’t approve Warren and Schumer’s plan to forgive up to $50,000 in student loans. That said, Sanders’ voice carries considerable weight within the Democratic Party. (3 ways to get student loan forgiveness now). He represents the progressive side of the Democratic Party and finished second to Biden in the 2020 presidential race and second to Hillary Clinton in 2016. Along with other advocates such as Rep. Alexandria Ocasio-Cortez (D-NY) and Ayanna Pressley (D-MA), Sanders could help pressure Biden to enact large-scale student loan forgiveness through an executive order. (Biden canceled $15 billion in student loans). To date, however, Biden has pushed back on that idea, saying he doesn’t think he has such authority to unilaterally cancel student loans without Congress.

(Student loan refinance rates are ridiculously low).

Student loans: next steps

The next steps for your student loans is to watch the latest headlines on student loan relief and forgiveness. Student loan relief – including temporary student loan forbearance – is expected to end soon. This is why it is essential that you prepare for the end of student loan relief. While Biden could extend student loan relief, the White House and Education Department have focused on restarting student loan payments as planned.

Make sure you know each of your student loan repayment options, including these popular ways to pay off student loans faster:

Student Loans: Related Reading

If Biden cancels student loans, it will happen next

3 ways to get student loan forgiveness now

Will student loan repayments be postponed until 2023?

Biden should end student loan relief

Student Loans – University of Southern New Hampshire Thu, 17 Feb 2022 21:11:27 +0000

SNHU participates in the Federal Direct Lending Program. Direct Loans are fixed-rate student loans for undergraduate and graduate students attending college at least half-time. Federal direct loans are the most common type of financial aid to help pay for education.

Direct Loans are available to eligible students who file a valid FAFSA. Please see your SNHU financial aid award letter for the amounts you are eligible for. For more information on terms and interest rates, please visit the Federal Student Aid website.

Subsidized and unsubsidized direct loans

Subsidized direct loans are granted on the basis of financial need. With a direct subsidized loan, the government pays interest on the loan while the student is in school and during the six-month grace period. New borrowers who take out federal direct subsidized loans on or after July 1, 2013 are subject to the 150% direct subsidized loan limit, which limits the length of time a student is eligible to borrow subsidized loans to 150% of the term. of its published program. .

Direct unsubsidized loans are interest-bearing loans that are not paid by the government. The borrower is responsible for interest on an unsubsidized loan from the date the loan is disbursed, even if the student is still in school. Students can defer interest payments while they are in school by compounding the interest, which increases the overall loan repayment amount.

Direct Loan Borrower Requirements

First-time direct loan borrowers must meet the following conditions before a loan disbursement is applied to their student account:

  • Complete online entry tips that help you learn more about a direct federal loan, how the process works, managing your education expenses, and understanding your rights and responsibilities as a borrower.
  • Complete the Master Promissory Note (MPN) which is a legal document in which you promise to repay the amount borrowed and any accrued interest to the US Department of Education. It also explains the terms and conditions of your loan(s). Review a sample MPN to fully understand the direct loan terms and conditions and borrower responsibilities. SNHU uses the multi-year MPN, which means that students can borrow additional direct loans on a single MPN for up to ten years.

Borrower Rights and Responsibilities

As a borrower of a direct federal loan, you have the right to:

  • Receive a copy of your promissory note before or after the loan is granted.
  • Receive a statement, including information about interest rates, fees, loan balance, and the size and number of payments, before your loan repayments begin.
  • Get a grace period or deferred payment on some loans after you leave school or go below halftime, before your payments start.
  • Prepay all or part of your loan without prepayment penalty.
  • Choose from multiple repayment options and periodically change your repayment plan as needed to achieve affordable loan repayment.
  • Receive written notice if your loan is sold to another lender.
  • Request a deferral (if eligible) of your loan payments for certain specified periods.
  • Seek forbearance from your lender/servicer if you are unable to make payments and do not qualify for a deferral.
  • Receive proof when your loan is fully paid off.

As a direct federal loan borrower, you are responsible for:

  • Repay your loan, including accrued interest and fees, whether you complete your studies, complete your program of study within the normal period allowed to complete the program, get a job, or are satisfied with your education .
  • Complete exit tips before leaving school or dropping below half-time enrollment.
  • Notify your lender/repairer within 10 days if you change your name, address or telephone number; fall below half-time enrollment status; withdraw from school or transfer; or change your graduation date.
  • Direct all correspondence to your lender/repairer, which may change during the term of the loan.
  • Make monthly payments on your loan after leaving school, unless you are in your grace period or have been granted forbearance or deferment.
  • Inform your lender/servicer of anything that may affect your eligibility for an existing deferral.

Annual borrowing limits

Annual loan amounts are defined by academic year and based on cumulative credits earned for a specific program of study.

Year Dependent student Independent student
Freshman (0-29 undergraduate credits) $5,500 ($3,500 subsidized maximum) $9,500 ($3,500 subsidized maximum)
Second year (30-59 undergraduate credits) $6,500 ($4,500 subsidized max) $10,500 ($4,500 subsidized max)
Junior and Senior (60 or more undergraduate credits) $7,500 ($5,500 subsidized max) $12,500 ($5,500 subsidized maximum)
Graduate student $20,500 (non-subsidized only)

Lifetime borrowing limits

Direct loan limits are set by the government and dictate the amount of direct loans a student can borrow.

Student type Lifetime borrowing limit
Dependent undergraduate student $31,000 ($23,000 maximum in subsidized loans)
Independent undergraduate student $57,500 ($23,000 maximum in subsidized loans)
Graduate student $138,500 ($65,500 maximum in subsidized loans)

Responsible borrowing

You should always borrow what you need to cover education costs and not just the amount awarded to you. After receiving your award letter, if you find that you do not need all of the loans to which you are entitled to cover current year tuition and expenses, be sure to reduce or cancel unnecessary loan amount(s). This will reduce your overall student debt when you start paying back. To review a loan award, please follow the procedure outlined in your award notification letter.

Direct loan instructions:

Students are required to sign a Master Promissory Note (MPN) and complete the Entry Loan Counseling (ELC) online before receiving a direct loan.

If you are a subsidized and/or non-subsidized direct loan first-time borrower:

Step 1: Complete the entry counseling session

  • Go to
  • Log in to your account (or create a new account) using your FSA ID.*
  • Select the “Undergraduates” drop-down menu
  • Choose “Complete Entry Tips”
  • Follow the instructions to complete entry counseling.

Step 2: Complete a Master Promissory Note (MPN)

  • Go to
  • Log in to your account (or create a new account) using your FSA ID.*
  • Select the “Undergraduates” drop-down menu
  • Choose ‘Complete Loan Agreement for Subsidized/Unsubsidized Loan (MPN)’
  • Follow the instructions to complete the Master Promissory Note.

* If you don’t remember your FSA ID, you can access it online at

exit advice

Once you graduate, move to less than half time status, or are no longer enrolled, there are exit tips you need to follow. Exit counseling prepares a borrower for repayment by reviewing borrowing history, identifying loan managers, forecasting monthly payment schedules, identifying repayment plans, and providing strategies for successful repayment. You can complete this online counseling requirement by:

  • Go to
  • Log in to your account using your FSA ID.*
  • Select the “Undergraduates” drop-down menu
  • Choose ‘Complete Exit Advice’
  • Follow the instructions to complete the exit board

National Student Loan Data System (NSLDS)

The National Student Loan Data System (NSLDS) is the US Department of Education’s online database for federal borrowers. The NSLDS receives data from schools, loan guarantee agencies, the Direct Lending Program, and other Department of Education programs. This online resource helps you be an informed borrower by providing loan types, loan amounts, loan managers, and disbursement dates. These details are the first steps in determining which repayment plans are right for you to successfully manage your debt.


Repayment for Federal Direct Loans begins six months after you graduate, withdraw, discontinue your studies, or have less than half-time enrollment status. The standard repayment term is ten years and the interest rate may vary depending on the type of direct loan and the date of disbursement.

Please see this sample repayment schedule (PDF) for an overview of loan repayment under the standard repayment plan. This chart is for estimation purposes only.

Visit the Federal Student Aid site to learn more about the following repayment plans and deferment/forbearance options depending on the type of federal student loan borrowed:

  • Repayment plan options include Installed, Extended, Revised Pay As You Earn (RPAYE), Pay As You Earn (PAYE), Income Based Reimbursement (IBR), Income Contingent Reimbursement (ICR) and Income Sensitive Reimbursement Plan.
  • Deferment options include enrollment in a graduate scholarship or approved rehabilitation training programs, unemployment, economic hardship, service in the Peace Corps, and active military service.
  • Discretionary forbearances include financial hardship, medical bills, job change, and other reasons acceptable to your loan servicer.
  • Mandatory abstentions include service in a medical or dental internship, residency program, qualified teaching, a recipient of the National Service Award in the AmeriCorps, and activated members of the National Guard.

loan officer

A loan officer is a company that handles billing and other services related to your federal student loan. Your loan is assigned to a loan servicer by the US Department of Education. The loan officer will provide regular updates on the status of your direct loan, work with you on repayment plans, loan consolidation, and assist you with other tasks related to your federal student loan. It is important to stay in touch with your loan manager. If your situation changes at any time during your repayment period, your loan manager will be able to help you. For more information on Loan Servicers, visit the Federal Student Aid site.

What is the Pay as You Earn Plan for Federal Student Loans? Thu, 17 Feb 2022 15:57:13 +0000

Our goal at Credible Operations, Inc., NMLS Number 1681276, hereafter referred to as “Credible”, is to give you the tools and confidence you need to improve your finances. Although we promote the products of our partner lenders who pay us for our services, all opinions are our own.

Pay As You Earn is an income-driven repayment plan that can lower your federal student loan payments. (Shutterstock)

Pay As You Earn (PAYE) is an income-based repayment plan that can help make your monthly federal payment student loan more manageable payments. Here’s what you need to know about the Pay As You Earn plan, who’s eligible, and how to apply.

If you are considering refinancing private or federal student loans, learn more about refinancing student loans and compare rates from multiple lenders with Credible.

What is Pay as You Earn (PAYE)?

Pay as you earn is a income-contingent reimbursement plan (IDR) offered by the US Department of Education that can reduce your federal student loan payments. It caps your monthly student loan payment at 10% of your discretionary income, which the Department of Education defines as the difference between your annual income and 150% of the poverty level for your state and family size.

The remaining balance of your student loan will be forgiven if you have not fully repaid your loans at the end of PAYE’s 20-year repayment period. But if you meet the requirements of Civil Service Loan Waiver (PSLF)the remaining balance of your loan can be canceled after only 10 years of qualifying payments.

To qualify for the PAYE plan, you must show partial financial hardship, which means your payment would be less with PAYE than the standard repayment plan amount.

You must continue to make your regular federal student loan payments until you are approved for PAYE. Once you’re enrolled in the PAYE plan, you’ll need to recertify every year — even if your income or family size hasn’t changed — or you could be removed from the program.

And it’s important to understand that your loan balance may actually increase while you’re on a PAYE plan. This can happen if your monthly payment amount is not enough to cover the interest you owe and the lender capitalizes the unpaid interest. Compounding means that the lender adds your unpaid interest to the principal balance of the loan.

How do you qualify for PAYE?

To qualify for PAYE, you must meet the following criteria:

  • You must be a new borrower on or after October 1, 2007.
  • If you took out a direct or FFEL loan on or after October 1, 2007, you did not have an outstanding balance on another direct or FFEL loan at that time.
  • You received funds for a direct loan or direct consolidation on or after October 1, 2011.
  • The payment you make under PAYE, depending on your income and family size, is less than what you would pay under the standard 10-year repayment plan.
  • You have a subsidized direct loan, an unsubsidized direct loan, a PLUS direct loan as a graduate or professional student, a consolidation direct loan that has not repaid any PLUS loans granted to parents, an FFEL loan or a federal loan Perkins.
  • Your federal student loans are not in default.

It is important to note that PAYE does not have a maximum income limit. It considers how much you earn relative to your federal student loan debt rather than how much you earn as a standalone number.

If you’re considering refinancing, Credible lets you compare student loan refinance rates without affecting your credit.

When the PAYE plan might make sense for you

PAYE can be a great option in some situations. You may want to explore this repayment plan if any of the following apply to you:

  • You do not expect a significant increase in your income. If you currently don’t earn much but receive a huge raise down the road, you may not be able to requalify for PAYE.
  • You are alone. Since two incomes can make it harder to prove partial financial hardship, PAYE may be easier to qualify if you’re single.
  • You have low income and large loan balances. If you don’t earn much but have a lot of federal student loans to pay off, PAYE can make your monthly payments more manageable.
  • You have a big family. With this reimbursement plan, the cost of living in your state (which is based on your family size) matters. If you have children, it may be easier to prove partial financial hardship.

Advantages and disadvantages of PAYE

As with all IDR plans, PAYE has pros and cons to consider.


  • It reduces your monthly payment to 10% of your Discretionary Income.
  • Any remaining loan balance can be canceled after 20 years (or 10 years with PSLF).
  • Your spouse’s federal student loans are also taken into account, which can make eligibility easier.

The inconvenients

  • If your income increases significantly in the future, you may not be able to continue making payments under the PAYE plan.
  • You will be liable for taxes if your federal student loan balance is canceled under PAYE. But if your loan is canceled between December 31, 2020 and January 1, 2026, the canceled amount will not count as taxable income, thanks to a provision of the American Rescue Plan Act.
  • If you opt out of the PAYE plan, your student loan payment may increase.

PAYE vs. other income-driven reimbursement plans

The Pay As You Earn plan isn’t the only option for repaying federal student loans. The Department of Education offers three other IDR plans to choose from. The repayment plan you choose affects the amount of interest you’ll pay over the term of the loan (although interest rates on federal student loans are generally lower than interest rates on private student loans). To learn more about IDR plans, visit Federal Student Aid website.

Pay As You Earn Review

  • Monthly Payment Amount — 10% of your discretionary income
  • Mandate’s duration – 20 years for undergraduate loans; 25 years for college or vocational loans
  • Eligible loans — Subsidized and unsubsidized direct loans, direct PLUS loans granted to students, direct consolidation loans which do not include PLUS loans (direct or FFEL) granted to parents
  • When interest capitalizes — If you voluntarily leave the plan or do not recertify

Income Based Reimbursement (IBR)

  • Monthly Payment Amount — 10% of your discretionary income if you are a new borrower on or after July 1, 2014; 15% of your Discretionary Income if you are not a new borrower on or after July 1, 2014 (both payment amounts will not exceed the standard 10-year repayment plan amount)
  • Mandate’s duration – 20 years if you are a new borrower on or after July 1, 2014 (or 25 years if you are not a new borrower on or after July 1, 2014)
  • Eligible loans — Direct Subsidized and Unsubsidized Loans, Subsidized and Unsubsidized Federal Stafford Loans, Student PLUS Loans, Consolidation Loans (Direct or FFEL) which do not include Parent PLUS Loans
  • When interest capitalizes — If you are no longer in partial financial hardship, do not recertify or voluntarily leave the plan

Income Contingent Reimbursement (ICR)

  • Monthly Payment Amount — Either 20% of your Discretionary Income or what you would pay on a repayment plan with a 12-year fixed payment (whichever is lower)
  • Mandate’s duration – 25 years
  • Eligible loans — Direct Subsidized and Unsubsidized Loans, Direct Student Loans PLUS, Direct Consolidation Loans
  • When interest capitalizes — If you do not recertify

How to apply for PAYE

You can complete the PAYE application process online by following these steps:

  • Go to the IDR plan request page on the Federal Student Aid website.
  • Click “Login to Get Started” under the “New Applicants” section.
  • Log in with your FSA ID, which is the same ID you used for the FAFSA when you originally applied for federal student loans.
  • Complete the application, which usually takes 10 minutes or less.
  • Connect the request to your IRS tax form or submit the most recent copy of your tax form to your student loan officer.
  • Enter your income into the loan repayment calculator.
  • Select the PAYE plan if you qualify.
  • Enter additional personal information and submit your application.

Alternatives to PAYE and Income-Based Reimbursement Plans

If an IDR plan isn’t right for you or you don’t qualify, consider these other ways to manage your student loan debt:

  • Double your payments — If you pay more than the required minimum each month, you can shorten your repayment period and save on interest over the life of the loan.
  • Adjournment or abstention — With these options, you can temporarily defer or reduce your federal student loan payments. If your loans are deferred, they will not earn interest. But if your loans are forbearance, interest will continue to accrue on the balance. To apply, contact your student loan officer.
  • Refinance — Refinancing can potentially lower your interest rate and your monthly payments. Remember that you will have to refinance a federal loan into a private loanwhich will cause you to lose the benefits and protections that come with federal loans, including access to income-based repayment plans and the PSLF.

With Credible, you can compare student loan refinance rates from various lenders in minutes.

Feds launch investigation into private student loans made by for-profit colleges – National Consumer News | Educating and Helping American Consumers | Disclose Fraudulent Advertising Mon, 14 Feb 2022 18:40:35 +0000

The Consumer Financial Protection Bureau (CFPB) says it will review the operations of post-secondary schools, such as for-profit colleges, that provide private loans directly to students.

The CFPB publishes an update to its examination procedures including a new section on institutional student loans. As CFPB Begins Oversight, Examination Procedures Inform Industry of Practices CFPB Examiners Will Examine, Including Imposition of Enrollment Restrictions, Withholding of Transcripts, Undue Expedition of Payments , failure to issue repayments and maintaining improper loan relationships.

“Schools that offer students loans to attend their courses have a lot of power over their students’ education and financial future,” CFPB Director Rohit Chopra said. “It is time to open the books on institutional student loans to ensure that all students with private student loans are not harmed by illegal practices.”

Private education loans are extensions of credit given to students or parents to finance undergraduate, graduate, and other forms of post-secondary education. Private education loans may be offered by banks, non-profit organizations, non-bank organizations, credit unions, government-affiliated organizations, and institutions of higher education, including schools for-profit and non-profit schools. These loans are generally not affiliated with federal student loan programs administered by the United States Department of Education. When loans are given directly to students by the school they attend, they are often called institutional student loans.

The CFPB is concerned about borrowers’ experience with institutional loans due to past abuses in schools, such as those operated by Corinthian and ITT, where students have been subjected to high interest rates and collection practices. strong debts. Historically, schools have not been subject to the same service and origination oversight as traditional lenders.

In the mid-2000s, many lenders and higher education institutions were caught making kickback arrangements that incentivized schools to refer students to certain loans. Congress subsequently enacted student loan disclosure reforms and outlawed certain practices. Congress also gave the CFPB oversight authority over entities that issue private education loans, including institutional loans. When reviewing institutions that offer private education loans, in addition to looking at general loan issues, reviewers will look at the facts regarding certain actions that only schools can take against their students. Specifically, CFPB examiners will examine:

  • Place registration restrictions: Students who fall behind on their loan payments may be prevented from enrolling or attending classes, which could delay graduation and prevent them from finding employment.
  • Withholding of transcripts: When a school withholds the transcripts of students who owe it debt, it prevents students from using their transcripts to demonstrate their level of education in the job market.
  • Improperly Accelerated Payments: Schools that use acceleration clauses in their loans when a student withdraws from the program could impose a heavy financial burden on the student by making the loan immediately due and collectible.
  • Failure to issue refunds: If a borrower withdraws from a program early, they may be entitled to certain reimbursements by the school.
  • Maintaining inappropriate loan relationships: Schools that have special relationships with certain lenders may pose risks to students because, for example, they may end up paying more for their loan.

The Education Loan Exam Procedures manual is intended for use by CFPB examiners, and the Office makes it available as a resource for anyone taking its examinations. These procedures will be incorporated into the general CFPB oversight and review manual.

Students and their families can find help on how to tackle their student debt through CFPB’s Paying for College suite of tools. Student borrowers experiencing problems with student loan repayment or debt collection can also file a complaint with the CFPB.

More information is available at

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces federal consumer finance law and ensures that markets for consumer financial products are fair, transparent and competitive. For more information, visit