I Learned Something The Other Day About Student Loans...

[global1]

This former student has a 6 figure student loan. Been paying on it for over 10 years and the payments only cover the interest and hasn't touched the principle.

I asked if she has gotten any relief thru Biden's efforts and here's what she told me.

Her student loan was sold to another company and because this company was not a 'student loan sanctioned' company - it doesn't qualify to be able to be paid down by the government.

She is stuck to pay this loan off without any help from Biden or the government.

Has anyone else heard about this problem? Is it legal to sell a loan to another loan shark company? Does she have any recourse with this company?

Any advice you can post here would be appreciated.

[RealFloridaDem]

1. She nees to consolidate it into a IDR plan - that's what I did

I had that problem, albeit not as high. If she has the right federal loan she can consolidate it.

With about 11 months left for the covid loan payoff I consolidated it into a proper income driven repayment plan with studentaid. I then applied for PSLF because I work for Public Sector and have been paying for it for years.

Got the Forgiveness.

She won't get the forgiveness unless she works that 10 years in public and assuming the cheetoh tyrant doesn't get rid of it.

Here is info.

https://studentaid.gov/manage-loans/consolidation

[defacto7]

2. Biden's relief programs like Fresh Start are on hold until Feb 2

per court order. Everyone who has applied for them is on a temporary forbearance until the new admin decides what to do. If Harris was President elect, it would continue. Since Trump is President elect, those programs will be cancelled.
Sorry.

[mike_c]

3. yes it is legal and it happens all the time

Loan holders can also refuse to consolidate your loans, or at least they could back in the day. I have paid off some of my loans, had others forgiven for public service, but there's one left that a bottom-feeding lawyer in LA bought 30-ish years ago and refused to consolidate with the others.

[haele]

4. Sounds like she didn't have government loans.

My Student loans were made through the Government; Direct Subsidized and Unsubsidized loans.
There are other student loans that are specific to the school - the old Perkins loans - or commercial loans indirectly subsidized by the Government, but they aren't from the Government.
(The subsidized loans are the lower percentage, - 2.5 to 5%, unsubsidized are at Market rate - 4% to 7%, depending on when they were granted).
So the Biden Forgiveness only applies to Government loans.

Haele