Student Loan Debt Relief Services

There are different options to solve student loan debt

Your financial situation is different from someone else. The student loan debt relief service that works for someone may not be the best choice for someone else.
You should take the time to understand all the debt relief options available to you to find the best solution for your needs and goals.

Student Loan Debt Relief Options

ii
student loan refinancing

Student loan refinancing allows qualified borrowers to combine private and federal student loans, adjust the interest rate and repayment terms on the new loan, saving thousands in total interest over the term of the loan. Student loan refinancing is a great option for most people, but it isn’t always the best option for everyone.

student loan forgiveness

Student loan forgiveness is a process that eliminates a portion of your educational loan debt without penalties. This means you are no longer obligated to make your loan payments.  You will need to invest time and patience in the qualification process.

ll
student loan Settlement

Student loan debt settlement is a process of resolving you delinquent loan debt for far less than the amount owed by promising the lender a substantial lump sum as full payment. But it does come with some considerations and there are alternatives to think about if you find yourself in default.

federal student loan relief

Federal Student Loan Relief are a series of debt relief programs where your payment on a federal student loan can be adjusted to reflect your income and family size (your ability to pay) rather than the terms of the loan. An income driven repayment (IDR) plan and can reduce your monthly student loan payments.

Student Loan Debt Relief - Loan Refinancing

Student loan refinancing is a means for you to reduce the financial burden your student loans have on your life. Student loan refinancing is a great option for most people, but it isn’t always the best option for everyone.

Student loan refinancing allows qualified borrowers to combine private and federal student loans, adjust the interest rate and repayment terms on the new loan, saving thousands in total interest over the term of the loan. This process allows you to make monthly payments that pay off your loans faster, lock in a fixed interest rate, or remove a parent as the cosigner of a private loan. Depending on the interest rate and number of years it will take to pay off your new loan, refinancing can reduce your monthly payment, your total interest paid, or both.

You can get student loan refinancing through private lenders. Most lender do not charge prepayment penalties, loan application fees, or origination fees. Qualifying for the loan will depend on a number of factors including your credit and earnings history, credit report, the school you graduated from and the amount of the loan you want to refinance. The most common reason borrowers are turned down for refinancing is not their credit score, but excessive debt-to-income ratio (DTI).

If you decide to refinance you federal student loan, you will lose potential benefits like income-driven repayment and Public Service Loan Forgiveness.

Student Loan Debt Relief - Loan Forgiveness

Student loan forgiveness is a process that eliminates a portion of your educational loan debt without penalties. This means you are no longer obligated to make your loan payments. The Federal government offers various student loan forgiveness programs, where you qualify based on your profession or government service. Each program has their specific requirements to be eligible for this benefit. Once you are eligible for one of these forgiveness programs, the servicer of your student loan discharges the balance that you owe on the loan. It is treated as your having paid off the loan balance as required. Depending on your circumstances, you will be required to pay taxes on the amount forgiven.

These are some of the most common types of federal student loan forgiveness. You will need to invest time and patience in the qualification process.

  • Teacher Loan Forgiveness – Applies if you teach full-time for five complete and consecutive academic years in a low-income elementary school, secondary school, or educational service agency. You may be eligible for forgiveness of up to $17,500 on your student loan plan.
  • The Public Service Loan Forgiveness (PSLF) – Applies to those working full-time in a qualified public service profession (teaching teaching and nursing) and some governmental and non-profit organizations. This is the most common program and forgives the remaining balance on your federal loans after you have made 120 qualifying monthly payments under a qualifying repayment student loan plan.
  • The Federal Student Loan Repayment – Applies to military service personnel with a minimum of three years of service. You may be eligible for a $10,000 annual reembursement (maximum lifetime of $60,000) from the Department of Defense.
  • Closed School Discharge – Applies if your school closes while you enrolled or soon after you withdraw.
  • Total and Permanent Disability Discharge – Applies to military veterans if they have a service related disability and cannot continue active duty. You are eligible for total loan forgiveness.
  • Volunteer Student Loan Forgiveness- Applies to those that have provided service to AmeriCorps, VISTA and Peace Corp. You are eligible for different amounts of student loan forgiveness based on program and length of service.

Give a man an education and he will build a new world, but give a man a loan and you can own that man forever.

Student Loan Relief - Loan Settlement

Student loan debt settlement (or debt adjustment) is the process of resolving delinquent debt for far less than the amount owed by promising the lender a substantial lump sum as full payment. Normally a debt settlement option occurs with your unsecured debt like credit cards, medical bills and personal loans. However this debt relief option can also apply to student loans and borrowers can arrange to pay less than what they originally owed. But it does come with some considerations and there are alternatives to think about if you find yourself in default.

This debt relief option is only available if you are in default on your student loans due to a financial hardship. In general, the time to pursue debt settlement is after you have gone into default (and the collections process has begun), but before any legal actions have been taken by your lender. Your loan lender may agree to settle for a lower amount than what you borrowed if it means resolving your debt without the need for collections, court judgments, or other actions.

However there is no legal obligation for your lender to negotiate. And, unlike other type of unsecured debts, student loans, with few exceptions, do not qualify for being discharged in a personal bankruptcy judgement. This means that your loan lender has less incentive to negotiate a settlement with you.

Unlike private student loans, federal student loans are a more limited option for you to negotiate a settlement. While you can technically settle your federal loans once they are in default, it is highly unlikely that you will be able to. Why? There are just too many ways the US government can collect from you once you are in default.

However, you have three standard alternative payment options via the US Department of Education private collections agencies. You will be required to pay your student loan settlement debt in one lump sum within 90 days of agreement. Also, you may also owe taxes on any unpaid interest forgiven as part of a debt settlement.

These federal debt settlement options are:

  • Pay all your current principal balance plus unpaid interest, with any future collection surcharges and fees waived.
  • Pay all your current principal balance plus unpaid interest, with any future collection surcharges and fees waived.
  • Pay 90 percent of the total principal and balance owed with 10 percent discounted.

Student Loan Debt Relief - Federal Loan Relief

Federal Student Loan Relief are a series of debt relief programs where your payment on a federal student loan can be adjusted to reflect your income and family size (your ability to pay) rather than the terms of the loan. Income Driven Repayment (IDR) is an acknowledgement by the federal government that for many, the salary you earn after earning your degree does not match the educational expenses you incurred in the process. IDR is an income driven repayment plan and can reduce your monthly student loan payments. If your payments are unaffordable due to a high student loan balance compared to your current income, an IBR plan can provide much-needed relief.

The primary benefit of IBR is that your monthly student loan payments are calculated based on what you earn, rather than what you owe. But there are several other benefits of enrolling in an income-based repayment plan, as well, including interest forgiveness, forgiveness at the end of your loan term, and loan forgiveness for public service employees.

While an IdR plan can offer several benefits for many student loan borrowers, this type of plan isn’t right for everyone. There are multiple drawbacks to Income-Driven Repayment, including increasing your time in debt (20+ years versus the 10 year standard repayment plan), increasing the total cost of the loan due to delays in principal and interest payments, annual need for payment recalculation and family recertification, penalties for failing to pay interest on your loan, and unexpected tax bills when the plan is completed.

The best IDR plan for you depends on your goals (smaller monthly payments, a shorter loan term, forgiveness after 20 years, etc.), as well as what kind of loans you need to pay off. There are four IDR plans to consider:

  • Income-Based Repayment (IBR) – If you took out a student loan after July 1, 2014, your payments are capped at 10% of your discretionary income and will make payments for 20 years.
  • Pay As You Earn (PAYE) – Your payment is equal to 10% of your income and never exceeds what your payment would be under a standard 10-year plan. The repayment term under PAYE plans is 20 years.
  • Income-Contingent Repayment (ICR) – An ICR plan allows you to pay the lesser between either 20% of your discretionary income or what you would pay with a fixed plan over 12 years. Borrowers who qualify for the 20% option can make payments under ICR for up to 25 years.
  • Revised Pay As You Earn (REPAYE) – Your payment is capped at 10% of your discretionary income. If you have loans from graduate or professional school, your income term can last up to 25 years.

Debt Relief Articles

This Internet site provides information and reference material to consumers. It is intended to help connect them with providers of products and services that may assist them in their financial needs.