SUCCESS! FedLoan Servicing WILL REVERSE $58,000 in improperly capitalized interest! Student Loans |
- SUCCESS! FedLoan Servicing WILL REVERSE $58,000 in improperly capitalized interest!
- How is everyone else mentally coping with the idea of being in student debt?
- How is loan payment going? Are/Were you in a lot of debt and was/is it hard to pay it off?
- How do US student loans work for international students?
- Does FedLoan capitalize accrued interest every year with recertification - or did something go wrong?
- Student Loan Interest Tax Deduction
- Severely Defaulted Student Loans
- TPD Discharge Approved - Monitoring Period Questions
- Taxes and student loans and married!
- All of my loans are fed loans totaling around 88k. I am a public school teacher who is planing on applying for PSLF because I am teaching in a high risk school. I am finishing up my masters degree so I’m in deferment. Should I make payments on my accrued interest or the principal balance?
- IBR interest question
- 200k+ in loans advice
- If I'm knowing incurring grad school debt, what can I do along the way to minimize the damage and get myself into a better position when I graduate?
- Question
- Services Refusing Payments
- Refinancing- What, How, and Why?
- Residentured Servitude: Resident Work Compared to Airline Pilots and Compensation Compared to Fast Food Workers
| SUCCESS! FedLoan Servicing WILL REVERSE $58,000 in improperly capitalized interest! Posted: 01 Apr 2018 08:48 PM PDT Here is the background history. This will be a long post, so I would skip it if you have no interest in the mechanics of capitalization. I hold a consolidated direct loan dating to September 2000. The original principle was approximately $53,000. Regrettably, this loan was in default from 2001 through 2014, by which point, my career had sprouted wings. So I contacted Pioneer Credit and voluntarily entered rehab in late summer 2014. I successfully completed the rehabillaitation program in spring 2015, and the loan was picked up by FedLoan Servicing in April of that year. When I exited rehab, approximately $58,000 in interest had accrued on my loan. It was not capitalized when I exited rehab. I believe this is because, as it turns out, the loan is essentially undocumented; more on that later. Anyway, fast forward 18 months and I am plugging along with repayment without issues. In June 2016, I accepted a position with a new employer, but due to the unexpectedly lengthy background check, my start date was pushed out a month later than expected. So I contacted FedLoan and asked if it was possible for me to skip a payment. FedLoan did not really ask any questions or provide any advice, they simply told me they would put my loan into forbearance. The service rep that I spoke with walked me through the online form on the phone, and suggested that I request three months in case of any administrative delays (or something), and I had no reason to be suspicious of anything, so I did as she directed. I did read the disclaimer notices before authorizing the forbearance and again, nothing seemed unusual, it basically said that I would be responsible for any interest that accrued during the forbearance, or else that interest would be capitalized. Fine. Click. Three month later, the forbearance expires and when the payment was extracted from my checking account, imagine my shock and horror to discover that it had doubled. Then, two days later, I received an alert from FICO that my credit scores (which were actually in the 770s at that point since I had no credit history coming out rehab) were cratering. Those dropped between 40 and 50 points overnight. What happened? You guessed it. FedLoan not only capitalized the interest that accrued during the three month forbearance period, but they also capitalized the $58,000 in interest that had accrued during default. This caused my principle balance to double and my monthly payments to double as well. Worse, my monthly payment was no longer sufficient to cover the interest that accrued each month, so my balance was actually increasing month-over-month. To cap it all off, because only the principle balance is reported to credit reporting agencies for student loans, and not the accrued interest, the principle balance reported for this trade line doubled overnight. And since the initial amount borrowed remained the same at $53,000, from a credit management perspective, this loan became an albatross. That's why my scores sank as described. Anyway, this kicked off a two-year odyssey with FedLoan during which I fought this capitalization with everything I had. I hired an attorney to draft a demand letter. I contacted the CFPB. I contacted Elizabeth Warren's office (I lived in Massachusetts when this happened). I contacted Sherrod Brown's office (I live in Ohio now). I did several rounds with the ombudsman group (who lack any sort of impartiality, by the way). Looking back over my phone records, I also made over 30 separate calls to FedLoan to discuss the matter. I attacked the issue based on several servicing errors. First, in many cases, depending on when the borrower signed the promissory note, the student loan servicer may be limited to the interest accrued during forbearance when capitalizing upon reentry to repayment. In my case, the version of the Direct Consolidated Loan promissory note that I signed in 2000 (which is very different from the one that exists today) is very explicit about what is permissible, and my case, it was only permissible to capitalize the forborne interest. Period. FedLoan tried to dispute the meaning of the words "during forbearance" throughout this process. I refused to let them get away with it. Second, the student loan servicer is obligated to advise borrowers of the impact that forbearance will have on their accounts. In my case, I only needed a one month pause in payments. They steered me into a three month forbearance, and even if they were permitted to capitalize retroactively, they are required by law to advise me of this, which they did not. If they had, then forbearance would have been the last thing I would have acceded to. I would sooner have rolled the dice by skipping the payment altogether and dealing with it later. Third, the law also requires that student loan servicers give 30 days' notice prior to capitalizing anything. Read all about it in the CFR, folks. Then go back and check your history to see whether your servicer is compliant with the requirement. In my case, FedLoan set up their workflow to send out a vaguely worded "interest notice" 20 days before the interest was due to capitalize. Do not allow yourself to be denied the opportunity to dispose of these matters under terms that are more favorable to your circumstances. You might need that 30 days to submit and process a hardship withdrawal from your 401K in order to pay off the interest before it is added to principle. Long story short, I just opened a letter from FedLoan stating that, in response to an inquiry from Senator Sherrod Brown, they will be removing the three month forbearance from my account, which will allow them to reverse the capitalization and recalculate my total balance as though it had never happened. In exchange, I am required to remit the three forborne payments ... which I have actually already paid, when you take into account the two years that I have been paying double what I was required to pay. I'm going to let that slide though. Just wanted to share the news that if you have been wronged by your services, it is possible to fight them and win. [link] [comments]  |
| How is everyone else mentally coping with the idea of being in student debt? Posted: 01 Apr 2018 12:36 PM PDT Recent grad here, just wondering what sort of landscape I'm being trust into. [link] [comments]  |
| How is loan payment going? Are/Were you in a lot of debt and was/is it hard to pay it off? Posted: 01 Apr 2018 10:56 AM PDT How much debt did you take on after finishing undergrad or grad school? Was it a lot? Was it or is it hard to pay off? How much do/did you pay monthly? How has it effected your life? Was it worth it? [link] [comments]  |
| How do US student loans work for international students? Posted: 02 Apr 2018 01:58 AM PDT Hi, I'm a student from Europe thinking of studying in the US, and I would like to know what the policy of student loans is regarding international students. Some main questions I have: 1. What is the usual interest rate? 2. What is the time frame in which I have to pay the loans back? Can I pay them back once I have a stable and good job or am I required to start repaying while still studying? Answers, advice, and additional resources are vastly appreciated. Thanks! [link] [comments]  |
| Posted: 01 Apr 2018 05:02 PM PDT This is my first year recertifying with FedLoan. I recertified well before the deadline. I was put on Forbearance in the same letter that they approved my recertification. I noticed the day after the auto-payment hadn't been made like normal. I called to ask why I was put on forbearance and they told me it was because I had been recertified - my first payment on the new PAYE in April and forbearance for March. They acted like this always happens. Literally "Why was I put on forbearance" "Because your loan repayment amount was recalculated." That makes no sense to me. Maybe because my new payments are lower than my old payments? I asked if my accrued interest would be capitalized and they said yes. I told them I didn't want that and they said they would "make a note" and I might be able to avoid it if I made my normal payment anyway (it was made one day late, and I have little faith that my accrued interest won't be capitalized.) Has this happened to anyone else? Or does FedLoan just normally capitalize accrued interest annually? That wasn't my understanding from all my research on PAYE up to now. [link] [comments]  |
| Student Loan Interest Tax Deduction Posted: 01 Apr 2018 07:15 PM PDT My wife and I have paid roughly 11k in interest on student loans in 2017. I am now finding that the tax deduction is only available on the first 2,500? Is there any advice on any other deductions pertaining to student loans that we can benefit from while filing taxes this year? [link] [comments]  |
| Severely Defaulted Student Loans Posted: 01 Apr 2018 01:34 PM PDT My wife and I filed taxes together for the first time after getting married a few years ago and they took our income tax refund because of her student loans. On the myeddebt.ed.gov website we can view the loan. It is a FFEL loan with a balance of about $12K We received a different letter last week from a collection agency about a Federal Perkins Loan. My wife has not been enrolled in school or takening any loans in 15 years. She also does not remember exactly what all loans she had at the time. We definitely want to fix this correctly and finally put it in the past but are not sure the best way to go about it. There are no marks on her credit reports about any loans. Is it possible to do a federal student loan refinance and put both loans together on a payment plan? We are not to concerned about a debt forgiveness plan because we plan to pay it off in just a few years or so but would like a relatively low monthly payment and just pay bigger amounts as we go when we can. Would setting up something like this add the loans to her credit report with a lot of past bad history or would it start fresh and just show us making current payments or not show on the reports at all? I do have a concern about consolidating the loans and getting another letter next week about a third loan she has no current memory of. Is there anyway to find out if there maybe other loans? We have checked the nslds.ed.gov website and neither of these loans are listed or any others. Are there any pros or cons on a federal student loan refinance vs just getting a personal loan and paying them off? Is it possible to settle either loan in full for a discount on the fees being charged? [link] [comments]  |
| TPD Discharge Approved - Monitoring Period Questions Posted: 01 Apr 2018 04:23 PM PDT My step dad was approved for a TPD discharge of Parent Plus loans. He is subject to a 3-year monitoring period. From what I understand, since he was approved this year, the discharge amount will be viewed as income this year for tax purposes. This means that come tax filing season next year, there will be a tax bomb worth approximately 25%-30% of the discharge amount. Okay, that's fine. Assume we pay the tax bomb. What if, for whatever reason, his disability status is revoked in Year 2 of the monitoring period and the loans are reinstated? In other words, he'll stop being classified as "totally and permanently disabled." Now what happens to the tax bomb money we paid? Do we get the tax bomb money back as refund from the IRS? Is that amount then applied to the balance instead? Is it maybe possible to defer paying the tax bomb until the 3-year monitoring period is over? I know another requirement is to have employment income below the poverty line for a family of two (regardless of actual family size). To clarify, this does NOT include income from social security/disability, correct? This only includes income from ACTUAL employment (wages)? Thanks in advance. [link] [comments]  |
| Taxes and student loans and married! Posted: 01 Apr 2018 03:43 PM PDT So before I met my husband I went to grad school in 2009. Didn't want to go but was forced to so I could get health insurance. I took out many unsubsidized federal stafford loans to mainly pay for my health insurance (about 80% of it) and my schooling (about 20% of it). Tried very hard to get my degree but my advisor was an asshole and didn't help me so I quit school in 2016. Between 2009-2016 I deferred my loans because I'm only making $20,000 or less every year. So 2017 I get married. Deferred my loans again because I only have to show them my tax returns from the previous year. So here we are doing our taxes for 2017. My husband makes 70,000 a year and I make about 4,000 a year. Because of circumstances we owe about 3,000 almost. That number is filed married jointly. Now we are rethinking this. If we file married separately wouldn't that make more sense for me when my deferment is up again this summer? He would owe even more but I wouldn't owe that much and the monthly payments on my loan would be lower. If we file married and jointly we will owe less in taxes but the monthly loan payments will be much higher. Do I have this correct? There is no way to defer my loans any longer now that we are married and out joint income is about 74,000 even though my income is only 4,000. Is that correct? I feel like since we got married we are screwed between the health care and the student loans and now the taxes. We are already living with parents and paying about 1,000 a month for health insurance for both of us. My loans are at about 50,000 as of now and based on the loan payment calculators it would be as little as 530-800 a month! We don't even rent or own yet and we are struggling just paying my medical insurance. We also are paying off credit cards about $30,000 in those. How do we do this? We live in California if that is relevant. Advice please. [link] [comments]  |
| Posted: 01 Apr 2018 07:20 PM PDT |
| Posted: 01 Apr 2018 06:05 PM PDT The IBR payment on my public loans is $0. I am not in forbearance. The payment due is literally $0 because of my income. However, the interest keeps accruing. Shouldn't the interest be decreasing, as though I was making some kind of payment (because I am -- a payment of $0)? [link] [comments]  |
| Posted: 01 Apr 2018 03:55 PM PDT Hello everyone, i'm currently a new grad Physical Therapist looking to figure out the best way to pay off my loans and was hoping for some advice. I would like to pay off my loans ASAP and am considering consolidating my loans. Here are my current loans and expenses. Federal Loans: Unsubsidized Federal Stafford Loan - $8,637 @6.8% Unsubsidized Federal Stafford Loan - $10,103 @ 6.8% Direct Subsidized Loan - $3,611 @3.4% Direct Subsidized Loan - $4,703 @3.4% Direct Unsubsidized Loan - $11,149 @6.8% Direct Unsubsidized Loan - $4,568 @6.8% Direct Unsubsidized Loan - $24,729 @5.4% Direct Unsubsidized Loan - $24,098 @6.2% Direct Unsubsidized Loan - $22,685 @5.8% Direct Unsubsidized Loan -$21,403 @5.3% Direct PLUS Loan - $5,365 @6.3% Direct PLUS Loan - $12,490 @6.3% Direct PLUS Loan - $3,122 @7.0% Direct PLUS Loan - $4,098 @7.0% Total of $160,671 @ ~Avg 5.9% Private Loans Sallie Mae - $18,045.65 @7.5% Sallie Mae - $10,736.41 @7.5% Sallie Mae - $5,188.06 @8.375% Wells Fargo - $6,203.53 @7.49% Wells Fargo - $14,803.56 @8.49% Wells Fargo - $8,433.64 @9.24% Total of $63,410.85 Expenses $319/month Auto Loan Income Only received 2 paychecks so far $4600 each post tax, so $9200/month. Honestly this probably won't be consistent so i'm planning for around $6,000/month post tax. Plan The rates i'm receiving around 4.9%-5.4% for consolidation with Citizens Bank providing the lowest out of SoFi, Laurel Road, Citizens Bank & Common Bond. Should I be consolidating just my Private Loans and placing the Federal Loans on an Income Driven Repayment Plan, while focusing on paying off the private loans first then the Federal next? Or consolidate all my Federal+Private and just hack away at it? Thank you for taking the time to read this headache. [link] [comments]  |
| Posted: 01 Apr 2018 02:49 PM PDT Edit: TL;DR at bottom 3 year program, 48k/year Waiting to hear if I'll get an assistantship the first year (¼ or ½ off). Also potential other scholarship for 4k. Awarded 5k in Fed Work Study (unsure how this works) So, as of right now, the best I can do is bring my tuition for the first year down to about 15k. I think that 4k scholarship isn't available the second year, but getting an assistantship is possible. Third year, don't think either of those are available, but there is another scholarship worth a good chunk (like 10-20k?) I only have about 600 in stocks on RH, and a few hundred in my checking. My only debt is my student loans. Which is significant. Roughly 55k rn So I could see an addition of up to 144k (if no help with tuition all student loan), but likely less than that, I feel the amount is likely to be in the range of 50-90k added on. I'll be trying to work while in school. But I'll likely have an in-school job (the assistantship), not to mention my graduate courses. I'll probably try to get oddball photography jobs, or be a freelancer for some of the dailies. (Oh yeah, MFA in photo at SVA in NYC, on of the top 5 art schools in America/top 10ish in the world). But I'm not above service jobs, late nights, bar work, etc. I'm p worthless around anything constructiony. Here are some questions: 1. Should money I might put in an IRA/Roth/Long Term Savings go towards paying the loans' interest instead?
TL;DR 3yr MFA in Photo at top school in NYC. Some scholarships, but def getting loans back, wondering what best thing to do with any extra money during 3 years, or if I should even take out any extra money, but then how to afford living in NYC AND doing well in school? Edit2: plan to do Peace Corps after, and then 8 more years of teaching at a public school or working for a non-profit, and get loans forgiven. Open to other ideas. Will marry rich if possible. ;) (jokes aside) also will always be trying to hustle my photography, and get commercial and editorial work. I think I've got the chance to be good enough to make a living from this. [link] [comments]  |
| Posted: 01 Apr 2018 05:36 AM PDT Hello all, so long story short I have finally made enough money from my investments to pay off my loans. BUT, I heard that there is a limit and if you pay your loan down enough, they will close the account. My loan provider is Nelnet, and I just paid the one loan down so there is $46 left. Is that low enough to close the account and for me to save $46? (They capitalized like $2k in interest, and this is sort of a petty attempt at recouping some of that). Thanks! [link] [comments]  |
| Posted: 01 Apr 2018 06:44 AM PDT Hello everyone, I've been trying to pay my loans (through Heartland) since Friday. I couldn't get anyone to answer the phone on Friday during their service hours. And nothing online seems to work. I've tried to pay my monthly amount (due 4/1, today) and they're not accepting. Anytime I try to submit a payment I receive a, "Sorry, we're experiencing issues at this time. Try again later." message from their site. I'm worried that they'll try to throw a late fee at me tomorrow and that their site is magically going to start accepting payments again... Anyone else having this issue? What should I do/say if they try to get me to pay a late fee? [link] [comments]  |
| Refinancing- What, How, and Why? Posted: 01 Apr 2018 04:07 AM PDT I have 3 semesters left in college so it's about time I start asking these questions. My dad has always said that I'll be able to refinance my loans after college. Between this sub, r/college, and r/personalfinance, I feel like refinancing might not do much for me or I won't qualify. My parents currently hold what I believe to be close to 100K in debt, so they're not the best financial resources in my life. What even is refinancing? I think it combines loans into one big loan, with a supposed better interest rate. Is that true? How does it work? Will it hurt my credit? Is there a reason I wouldn't be able to or shouldn't? If I go for my masters, which I might, should I refinance current loans? Or leave them until after? I currently have 6 Stafford, 2 HESAA, & 1 Sallie Mae, coming to about $51K. I will have a total of 3 more Stafford loans, and one more larger one from HESAA or Sallie Mae, depending on who accepts me. My HESAA loans around 6.5% and SM is a little over 12%. Any and all help is appreciated. TIA [link] [comments]  |
| Posted: 01 Apr 2018 02:21 AM PDT A discussion of resident pay-per-hour followed by questions of compensation in the face of specific debt rules. [link] [comments]  |
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