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I don’t know if I’m going from bad to worse or if I should just stay where I am

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Joined 2015-01-02

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Like a lot of people I borrowed heavily while I was in school just to make ends meet. I should’ve kept a better eye on things but I didn’t and now I have a ton of loans and I’m not sure what to do.  Due to some financial issues most of my loans are in forbearance right now but I have 2 that I have to pay on. My loans were originally being serviced by one company and then they split (obviously you know who it is). I got told by the 1st company that all my loans were in forbearance and then received a notice from the 2nd company that I was past due on 2 of my loans. I don’t make a lot of money and I’m supporting 2 people so I applied for an income-driven repayment plan. I hadn’t heard anything from the company so I called them. They said my application was denied because I checked the wrong box so they suggested I resend the application with the correction so I faxed it over that night. The day after speaking with someone on the phone I got a document from them saying that I had been approved for the Pay-As-You-Earn plan and my payments would be low. Then 2 weeks later I got another document saying that I had been approved for the Income-Contingent Plan and my payments would be triple what they were going to be. I called to ask what the deal was and was told my loans didn’t qualify for Pay-As-You-Earn, that it had been a mistake, and the new payments were what was required. No one would explain to me why my loans didn’t qualify or why it took them 2 weeks to figure out their mistake. I finally figured out on my own that I have some loans earlier than 2007 so I’m disqualified. Ok, got it but what about IBR? Why don’t I qualify for that? No one will answer my questions and I’ve recently looked into the company and found that there are a ton of people that have had even more troubling experiences than I have. So I looked into Consolidation. I went as far as to apply and then I had them cancel my application because now I’ve learned that the people I was going to consolidate with have a very bad track record too. So now I’m lost. I don’t whether to keep trying to fight it out with my current loan servicer or try and see if I get lucky with the consolidation company. Also I went to the federal student aid website and they mentioned choosing my consolidation company but I don’t remember that actually being an option when I applied. Another consideration is the fact that I work in a public service job and should qualify for PSLF but I’m not sure how to go about that either. Any advice would be greatly appreciated.

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Total Posts: 29

Joined 2014-10-06

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Here is a link for the different Income-Driven Payment Plans… https://studentaid.ed.gov/repay-loans/understand/plans/income-driven . And for PSLF ...  https://studentaid.ed.gov/repay-loans/forgiveness-cancellation/charts/public-service. And be aware that if you have made eligible payments for PSLF already, when you consolidate you are creating a brand new loan and the 120 payment PSLF clock restarts - previous payments before consolidation won’t count.

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Total Posts: 2

Joined 2015-01-02

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I’ve only made one payment so far with my current loan servicer but it sounds like I have no choice in who I deal with if I want to take advantage of PSLF, right?  From what I’ve read FedLoan Servicing is the only company that deals with it.  So then my dilemma becomes whether to consolidate or not.  It sounds like all my loans will go to FedLoan Servicing because of the PSLF.  Right now I’m only paying on 2 so I can see maybe leaving them alone for now but when my other loans get added in, is it better to consolidate so I only have one payment?

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Total Posts: 29

Joined 2014-10-06

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Well I’m just a fellow student loan holder and don’t rely on what I say, but my understanding is that when you fill out the PSLF employer certification, ALL federal student loans you have are then transferred to FedLoan Servicing. FedLoan was chosen by Dept of Ed for PSLF, so yes, they are the only option. But doing PSLF is separate from consolidating your loans. Some people like me consolidated so that they could turn their non-Direct federal loans into federal loans. But if you want to do PSLF, my understanding is that if you already have multiple qualifying loans (i.e., Direct Loans), you don’t have to consolidate them to be eligible for PSLF.