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Student Loans

Who controls your loan?

Most people know who their servicer is such as Navient or Great Lakes who they make their
payment to. This, however, is not who actually controls your loan. Just because a loan is
serviced by Navient does not mean it is a federally funded student loan. Navient, Great Lakes
and many other servicers deal with both Federal and Private student loans. This can make the
process very difficult for individuals to figure out which type of loan they have.

Types of payment plans:
For just Federal Student Loans there are more than 9 different payment options. These include
4 Balanced based repayment plans: 
 Standard 
 Graduated 
 Extended
 Extended Graduated 

There are also 5 income-based repayment plans which require a special process to apply for.
These are: 
 Income Contingent Repayment
 Income Based Repayment
 Pay As You Earn
 New Income Based Repayment
 Revised Pay As You Earn

Each of these options have different requirements to be able to qualify. At Martelle Gordon &
Associates we will go through each and every single one to see which is the best repayment
plan for you and your family. Your servicer will often put you on the first repayment plan that
seems to fit, but this may not be right for you.  We may be able to help reduce the overall
payment. These payments can be as low as $0 a month for people that have lower incomes.
With so many repayment options available, there are plenty of choices available to individuals to
best suit your life circumstances. When you are going through difficult times, there are options
available to you to adjust your payment to fit your needs.

Forgiveness:
When most people think of student loan forgiveness they only think about the 10 year Public
Service Forgiveness. This, however, is not the only type of forgiveness student loan debt. If you
qualify, income-based repayment plans have a forgiveness term to them. There are also many
other forms of forgiveness for teachers, disability and others. The 10 year forgiveness also
applies to individuals working in non-profit sectors. These can be major companies including
most hospitals so nurses can potentially qualify for the 10 year forgiveness.
Having a knowledgeable attorney who can navigate these complicated issues is the best
investment to financial freedom and making sure you are not saddled by student loan debt for
life. Most Public Service Loan Forgiveness applications were rejected in 2019; however this is
mostly due to individuals not understanding the qualifications necessary to ensure forgiveness.

Most of these rejections were due to lack of qualifying payments. Hiring an attorney from the
beginning to monitor the process and ensure each payment counts toward eventual forgiveness
significantly raises your chances.

Default:
When a borrower defaults, their loan can be handed off to debt collectors who will harass
people to get the money. With student loans, debt collectors have much more authority than on
simple credit card debt. This can include collection fees of up to 25% and administrative wage
garnishments taking up to 15% of disposable earnings. Collection efforts can also result in the
garnishment of your federal tax refund, a Social Security offset, lawsuits, a denial or revocation
of a security clearance, jeopardization of Federal and State licensing, and other actions deemed
necessary for the collector to get paid. 

 

Luckily, there are many options available to individuals to cure any sort of default on a student
loan. These include settlements, consolidation, and rehabilitation. Each of these processes take
a lot of time and knowledge of their requirements, but will cure any default on the student’s debt.
Hiring an attorney at our firm can help navigate this treacherous and potentially scary time and
can ease the burden on you. We take over communication and set you up on the path to getting
out of default and hopefully onto a payment plan with forgiveness that works best for you.

 

Future planning
For parents, planning for the future while your child is at home and school can ease the burden
on you both.  While your 18 year old may not understand the true cost of attending the most
expensive college and the potential of a lackluster job market, you understand the financial
stress that can come later. Planning for the future both while your child is at home and away at 
school can ease that burden on the other side. We can help you understand the pros and cons
of things such as a Parent Plus loan or co-signing on private student loans. These things can
make you personally responsible for the debt should your child fall on hard times and not be
able to make the payment. Knowing your options can help you and your child make the best
decisions possible.


Students, if you are wanting to know how much your student loan payment can be with different 
income scenarios, we can sit down with you even before payments begin so you can better plan
ahead.


Remember, student loan debt is not dischargeable in bankruptcy except in extreme
circumstances, and a failure to make your payments can result in serious consequences. Falling
behind on this debt can mean dire financial strain in the future and can create real problems
down the line. We can help to ensure that you are better able to handle these problems before
they ever begin.

© 2020 by Martelle Gordon & Associates.

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