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January 26, 2015

What Triggers Student Loan Interest Capitalization?

Sometimes a student loan borrower isn’t required to make payments on his or her loans, for example: • when he’s in school his loans and his loans are in deferment,  • for the six months after he leaves school when his loans are in a grace period, and • during other periods of authorized deferment or forbearance.  But on unsubsidized loans, interest is nearly always accruing (with a few exceptions).   So if a borrower isn’t making payments, what happens to the unpaid interest?   Specific events…

By Heather  |  Category:  Pay As You Earn, IBR, Student Loan Repayment  

January 21, 2015

Private Student Loan Consolidation or Refinancing

Many of us have private loans at variable interest rates, sometimes with no cap on how high the rate can climb. If you have expensive private student loans and good credit, refinancing may be available and worthwhile. For example, with a strong credit score, you might be able to refinance at a lower or fixed interest rate instead. Unfortunately, if your credit score is low, or you are experiencing financial distress, you’ll probably have a difficult time qualifying for the best refinancing terms. And BEWARE of consolidating federal loans into…

By Heather  |  Category:  Private student loans  

December 4, 2014

Rohit Chopra and CFPB Piss Off Private Student Lenders

Ombudsman Rohit Chopra of the Consumer Financial Protection Bureau (CFPB) can sleep soundly at night knowing he is doing something right.  The Wall Street Journal quotes Richard Hunt, president of the Consumer Bankers Association, as stating “There’s more tension between banks and those in the CFPB’s student-lending division than in all other areas of the CFPB combined.” Why is the private student loan industry so pissed off?  The CFPB and Mr. Chopra have persistently pushed private lenders to modify or refinance…

September 22, 2014

Expanding Pay As You Earn by Negotiated Rulemaking

The Department of Education has announced its intention to convene a negotiated rulemaking committee to develop regulations that expand the President's Pay as You Earn repayment plan by allowing more borrowers to cap their federal student loan payments at 10 percent of their income with the goal of making the expanded PAYE repayment option available to borrowers by December 31, 2015. Negotiated rulemaking is required by law for programs authorized under Title IV of the Higher Education Act of 1965 (unless the Secretary of the Department of Education…

September 19, 2014

How Income is Established for Calculating Student Loan Payments

Submit the Income-Driven Repayment Plan Request online at studentloans.gov.  If you have filed a federal income tax return in the past two years and the income on your most recent federal income tax return is not “significantly different” from your current income, you may use the IRS Data Retrieval Tool in the application to import the most recent year’s Adjusted Gross Income (AGI) into your application.  Your monthly payments will be calculated based on that AGI. Married student loan borrowers can choose to either: file…

By Heather  |  Category:  Pay As You Earn, IBR, Student Loan Repayment  
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