Refinancing Federal Student Loans

[Minnesota!]

So, I have a decent sum of federal student loan debt. I pay over what the monthly requirement is, and still…getting nowhere. So much goes to interest. Up until the last year or so, DH’s job has not been stable, so I did not want to refinance it because of the safety net federal loans provide – income repayment options, forbearance, etc. However, things are a bit more stable now and I would like to refinance for a lower interest rate..

I was doing some research and was given so many options on where to look.

Looking for some real-life info, though.. not something Google gives me..

So, if you have refinanced, who do you go through? Nerdwallet gave me a bunch of options at a much better interest rate (currently my loans are at 5.625…).

Any insight? Or experiences?

Thank you!!

 

[lynzi2004]

We refinanced thru Credible about a year ago. We’ve been happy so far, not sure what cuurent rates are though.

 

[afan]

I refinanced over 10 years ago through an offer I got in the mail so not sure if it's still the same. My two fed loans that I consolidated together from two different banks and degrees kept their status because I've been able to.use deferral, change payments etc when I was unemployed.

My loans ended up sold to Sallie Mae which is now navient but it's all still the same.

 

[erin1715]

I'm following this as well. My husband has federal loans and the amount of interest we pay versus principle is nauseating. And you can only deduct a maximum of $2500 when filing taxes. It's insane.

But, my husband is a teacher so I'm hesitant to consolidate with a private company because if/when he's eligible for some of the loans to be forgiven, I think he would forfeit that if he chose to consolidate. I'm holding out for when he can get some of the amount forgiven, and then I might see if consolidating the remainder is a good idea.

 

[smiths02]

I'm following this as well. My husband has federal loans and the amount of interest we pay versus principle is nauseating. And you can only deduct a maximum of $2500 when filing taxes. It's insane.

But, my husband is a teacher so I'm hesitant to consolidate with a private company because if/when he's eligible for some of the loans to be forgiven, I think he would forfeit that if he chose to consolidate. I'm holding out for when he can get some of the amount forgiven, and then I might see if consolidating the remainder is a good idea.

If you are eligible for forgiveness in any way, you may also want to consider that, but make sure you are under the right repayment plan
Can you consolidate your federal loans with the government and get a lower interest?

A friend of mine used SoFi. We looked into it. 1/2 of my loans are locked around 3% (I consolidated before I got the other 1/2 of the loans), so I would keep those with the govt anyhow. The other half are floating and are at 6% now. Anyhow, we still might do it, but I was a little hesitant because it looked like DH might have to co-sign on the loans (they are in my name only now). I know that federal loans are not bankruptable, but if I was permanently disabled or died, they might get forgiven. If DH signs onto them through a private company, then the debt would live on.

 

[erin1715]

If you are eligible for forgiveness in any way, you may also want to consider that, but make sure you are under the right repayment plan
Can you consolidate your federal loans with the government and get a lower interest?

A friend of mine used SoFi. We looked into it. 1/2 of my loans are locked around 3% (I consolidated before I got the other 1/2 of the loans), so I would keep those with the govt anyhow. The other half are floating and are at 6% now. Anyhow, we still might do it, but I was a little hesitant because it looked like DH might have to co-sign on the loans (they are in my name only now). I know that federal loans are not bankruptable, but if I was permanently disabled or died, they might get forgiven. If DH signs onto them through a private company, then the debt would live on.

You know what, I just checked and they are consolidated with the federal government - interest rate is fixed at 6.25%. That is criminal.

 

[gottalovepluto]

I'm following this as well. My husband has federal loans and the amount of interest we pay versus principle is nauseating. And you can only deduct a maximum of $2500 when filing taxes. It's insane.

But, my husband is a teacher so I'm hesitant to consolidate with a private company because if/when he's eligible for some of the loans to be forgiven, I think he would forfeit that if he chose to consolidate. I'm holding out for when he can get some of the amount forgiven, and then I might see if consolidating the remainder is a good idea.

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/teacher might be able to answer some of your q's

 

[erin1715]

https://studentaid.ed.gov/sa/repay-loans/forgiveness-cancellation/teacher might be able to answer some of your q's

I appreciate the link. I've read through all of that before. My husband hasn't been teaching consecutive years long enough so thats why we're waiting. I also don't entirely trust that loans will actually be forgiven, though. I'm skeptical that the government will do what they say.

 

[gottalovepluto]

I haven't consolidated to a private party (and am not interested in doing so) so I can't offer any experience there. I did come across this: https://studentaid.ed.gov/sa/types/loans/federal-vs-private and while I'm sure you've already read this it might still help with a place to start. Obviously the "downsides" of the private loan will depend on exactly what loan you get. This list of comparisons might give you a starting point with questions to research out for any private loan you take out.

Are you getting a 0.25% discount on the interest rates for auto-paying? Idk if all federal loan servicers offer that but I remember knocking .25% off my rates by doing that when I first started paying my loans back.

 

[gottalovepluto]

I appreciate the link. I've read through all of that before. My husband hasn't been teaching consecutive years long enough so thats why we're waiting. I also don't entirely trust that loans will actually be forgiven, though. I'm skeptical that the government will do what they say.

Boy I get that!

 

[gottalovepluto]

...I know that federal loans are not bankruptable, but if I was permanently disabled or died, they might get forgiven. If DH signs onto them through a private company, then the debt would live on.

A very important point! It really can live on! I know someone who is still paying on their ex's private student loan debt that they stupidly co-signed onto. She disappeared and he was saddled with almost 100,000 in student loan debt he didn't even rack up. If you care for the co-signer know exactly what you are getting them into (obviously she didn't and this was her plan the whole time and he was an idiot, but I'm hoping everyone here does care for their co-signers!).

 

[ruadisneyfan2]

A very important point! It really can live on! I know someone who is still paying on their ex's private student loan debt that they stupidly co-signed onto. She disappeared and he was saddled with almost 100,000 in student loan debt he didn't even rack up. If you care for the co-signer know exactly what you are getting them into (obviously she didn't and this was her plan the whole time and he was an idiot, but I'm hoping everyone here does care for their co-signers!).

Wow! That is such a sad story. How can people be so rotten?

I don't know if this would be helpful to others since ours was such a small amount. Our ds21 went to college for 1 semester and quit. He had $2750 in Fed loans in his name and I had around $15k in a Parent Plus Loan. As pp mentioned, the Fed loans are forgiven if the student should become disabled or deceased. They are also much more forgiving if the payment should be late, you're out of work, etc. With private loans, if payment is one day late they can jack up your interest rates sky high and you're stuck.

Since we were expecting him to attend 4 years this would be quite a sum of $ so I looked into life & disability insurance for ds to see if it was any cheaper. Private loan + insurances vs. federal loans. Federal was still cheaper. (Yes, the odds of actually using this ins is so low but I work in a hospital/trauma center so I see "rare" sad events every day. I admit my view is completely skewed.)
After repayment began, the interest rate just gagged me and at the same time dh and I each got offers from our Disney visa for balance transfers with only 2% BT fee and 0% for 1 year. This way was still waaay cheaper than all the interest racking up. Both cards had $0 current balance on them. At the time I was frantically paying down some unrelated smaller debts that would free up a lot of monthly payment $. So it worked out very well. We let ds keep paying on his own loans and dh and I split the $15k PPL onto each of our Disney visas, so one wasn't taking on all the burden.
I paid off the smaller debts as fast as possible, while no more interest accrued on the PPL. Once I freed up more money to make much larger than min monthly payments, I had it knocked out in around 7 months.
If he ever decides to go back to school, it will be our local county college. For now, he's looking into joining the Navy.

For all of you trying to hammer out your debt, come on over to the Debt Dumpers thread.

 

[FredtheDuck]

But, my husband is a teacher so I'm hesitant to consolidate with a private company because if/when he's eligible for some of the loans to be forgiven, I think he would forfeit that if he chose to consolidate. I'm holding out for when he can get some of the amount forgiven, and then I might see if consolidating the remainder is a good idea.

OK, so you CAN consolidate your federal loans WITH the federal government and still be eligible for public service loan forgiveness. My DH did that for his for that reason.

I appreciate the link. I've read through all of that before. My husband hasn't been teaching consecutive years long enough so thats why we're waiting. I also don't entirely trust that loans will actually be forgiven, though. I'm skeptical that the government will do what they say.

A really important note here: You HAVE to be enrolled in specific payment plans in order to be eligible for PSLF. You HAVE to be on an income-based repayment plan (IBR), and FedLoans give you several options under that category. Just working in a loan-forgiveness industry for 10 years doesn't mean automatic forgiveness... you have to have at least 10 years of qualified service AND be on the right repayment option to qualify. Really, really important caveat, and I see people make the mistake of thinking that they're golden if they've been paying whatever their current fed loan payment is (say, graduated repayment, for example) and are close to 10 years of service, only to find out that because they weren't on an IBR, the payments they've been making don't count as qualified payments to the 10-years of repayment.

So for us, MY loans are with SoFi. I have nothing but good things to say about them, and there are some built-in terms for deferment, etc. I'm super happy with the payment amount compared to what I was paying with Navient. And I'm not in public service, so PSLF doesn't factor in for my loans. DH is eligible for PSLF, so we consolidated his and they're on an IBR with FedLoans. BUT we lost one big benefit when we moved mine to SoFi: My loans are no longer counted by FedLoans towards the amount of student loans our household has... which means when our IBR payment is calculated every year, it only takes in to account his loans, not mine, even though it factors in both of our incomes. Bit of an ouch.

 

[erin1715]

OK, so you CAN consolidate your federal loans WITH the federal government and still be eligible for public service loan forgiveness. My DH did that for his for that reason.



A really important note here: You HAVE to be enrolled in specific payment plans in order to be eligible for PSLF. You HAVE to be on an income-based repayment plan (IBR), and FedLoans give you several options under that category. Just working in a loan-forgiveness industry for 10 years doesn't mean automatic forgiveness... you have to have at least 10 years of qualified service AND be on the right repayment option to qualify. Really, really important caveat, and I see people make the mistake of thinking that they're golden if they've been paying whatever their current fed loan payment is (say, graduated repayment, for example) and are close to 10 years of service, only to find out that because they weren't on an IBR, the payments they've been making don't count as qualified payments to the 10-years of repayment.

So for us, MY loans are with SoFi. I have nothing but good things to say about them, and there are some built-in terms for deferment, etc. I'm super happy with the payment amount compared to what I was paying with Navient. And I'm not in public service, so PSLF doesn't factor in for my loans. DH is eligible for PSLF, so we consolidated his and they're on an IBR with FedLoans. BUT we lost one big benefit when we moved mine to SoFi: My loans are no longer counted by FedLoans towards the amount of student loans our household has... which means when our IBR payment is calculated every year, it only takes in to account his loans, not mine, even though it factors in both of our incomes. Bit of an ouch.

Everything you said is correct for Public Service Loan Forgiveness, but my husband is a teacher and his requirements are different.

I myself work in public service and I got screwed by this because I consolidated my loans with a private company before this forgiveness program existed, so I cannot get my loans forgiven. And my state is giving free college education now, which I would have qualified for if it existed back when I went to school. Oh and our lovely governor also wants to give free education to illegal immigrants. I'm not bitter at all.....lol

 

[FredtheDuck]

Everything you said is correct for Public Service Loan Forgiveness, but my husband is a teacher and his requirements are different.

I myself work in public service and I got screwed by this because I consolidated my loans with a private company before this forgiveness program existed, so I cannot get my loans forgiven. And my state is giving free college education now, which I would have qualified for if it existed back when I went to school. Oh and our lovely governor also wants to give free education to illegal immigrants. I'm not bitter at all.....lol

Everything you said is correct for Public Service Loan Forgiveness, but my husband is a teacher and his requirements are different.

I myself work in public service and I got screwed by this because I consolidated my loans with a private company before this forgiveness program existed, so I cannot get my loans forgiven. And my state is giving free college education now, which I would have qualified for if it existed back when I went to school. Oh and our lovely governor also wants to give free education to illegal immigrants. I'm not bitter at all.....lol

I thought teachers were eligible for the same PSLF option? https://blog.ed.gov/2017/01/4-loan-forgiveness-programs-for-teachers

I know TLF is different, but do you have the choice between one or the other? It used to be that you could to TLF, get a chunk forgiven, then start a new (10-year) clock on PSLF, but I'm not sure if it works that way now.

 

[erin1715]

I thought teachers were eligible for the same PSLF option? https://blog.ed.gov/2017/01/4-loan-forgiveness-programs-for-teachers

I know TLF is different, but do you have the choice between one or the other? It used to be that you could to TLF, get a chunk forgiven, then start a new (10-year) clock on PSLF, but I'm not sure if it works that way now.

Actually, I never thought of that. Well you better believe either way when the time comes we will try getting all the loan forgiveness we can, and that will only put a small dent in the total loans anyway. We'll be paying until we retire. Hopefully by then we'll have them paid off!

 

[runwad]

OK, so you CAN consolidate your federal loans WITH the federal government and still be eligible for public service loan forgiveness. My DH did that for his for that reason.



A really important note here: You HAVE to be enrolled in specific payment plans in order to be eligible for PSLF. You HAVE to be on an income-based repayment plan (IBR), and FedLoans give you several options under that category. Just working in a loan-forgiveness industry for 10 years doesn't mean automatic forgiveness... you have to have at least 10 years of qualified service AND be on the right repayment option to qualify. Really, really important caveat, and I see people make the mistake of thinking that they're golden if they've been paying whatever their current fed loan payment is (say, graduated repayment, for example) and are close to 10 years of service, only to find out that because they weren't on an IBR, the payments they've been making don't count as qualified payments to the 10-years of repayment.

So for us, MY loans are with SoFi. I have nothing but good things to say about them, and there are some built-in terms for deferment, etc. I'm super happy with the payment amount compared to what I was paying with Navient. And I'm not in public service, so PSLF doesn't factor in for my loans. DH is eligible for PSLF, so we consolidated his and they're on an IBR with FedLoans. BUT we lost one big benefit when we moved mine to SoFi: My loans are no longer counted by FedLoans towards the amount of student loans our household has... which means when our IBR payment is calculated every year, it only takes in to account his loans, not mine, even though it factors in both of our incomes. Bit of an ouch.

kinda, but you seem pretty knowledgeable about the TLF. I have a niece who is a special ed teacher and my sister is insistent she will get her loans forgiven in 10 years. She's not working in a low income district, I knew that and checked the link above. Do you know if there is anything different for special ed teachers? I'm just curious for my own knowledge, I'd hate for my niece to get to the end of 10 years and still owe when she was counting on them being forgiven.

 

[OhMari]

Everything you said is correct for Public Service Loan Forgiveness, but my husband is a teacher and his requirements are different.

I myself work in public service and I got screwed by this because I consolidated my loans with a private company before this forgiveness program existed, so I cannot get my loans forgiven. And my state is giving free college education now, which I would have qualified for if it existed back when I went to school. Oh and our lovely governor also wants to give free education to illegal immigrants. I'm not bitter at all.....lol

Live is Wisconsin? Me and my DD were bombarded with consolated letters when she graduated. She and her husband both work in the public sector and she does not qualify since she consolidated. I read an article that the percentage of people qualified for the forgiveness program is like 3% out of 100. There are so many hoops and loop holes, it is nearly impossible to qualify. Why, why does the government make it impossible.

 

[FredtheDuck]

kinda, but you seem pretty knowledgeable about the TLF. I have a niece who is a special ed teacher and my sister is insistent she will get her loans forgiven in 10 years. She's not working in a low income district, I knew that and checked the link above. Do you know if there is anything different for special ed teachers? I'm just curious for my own knowledge, I'd hate for my niece to get to the end of 10 years and still owe when she was counting on them being forgiven.

Special Ed teachers are still typically classified as classroom teachers and should qualify, assuming they’re working for a public school. Again, the type of loans and the repayment plan she’s on are going to matter. A call to the FedLoans number on that site would probably be a worthwhile double-check.

If it helps, this article breaks down the options, and there’s a handy link in it to a page that searches some state and local programs, too.

https://www.nerdwallet.com/blog/loans/student-loans/teacher-student-loan-forgiveness/

 

[Mackenzie Click-Mickelson]

So, I have a decent sum of federal student loan debt. I pay over what the monthly requirement is, and still…getting nowhere. So much goes to interest. Up until the last year or so, DH’s job has not been stable, so I did not want to refinance it because of the safety net federal loans provide – income repayment options, forbearance, etc. However, things are a bit more stable now and I would like to refinance for a lower interest rate..

I was doing some research and was given so many options on where to look.

Looking for some real-life info, though.. not something Google gives me..

So, if you have refinanced, who do you go through? Nerdwallet gave me a bunch of options at a much better interest rate (currently my loans are at 5.625…).

Any insight? Or experiences?

Thank you!!

Are you sure it's a federal loan rather than a private loan?

My federal loans the vast majority of the bill goes to Principal.

However my private loans are the opposite where majority goes to interest rather than principal.

How far you into your repayment period with your federal loans?