Student loan forgiveness

[Mackenzie Click-Mickelson]

I'm still waiting to hear on confirmation on my husband and I who paid ours off during the pause. While it's been said we're eligible (or likely eligible) it's been wishy-washy. Of particular interest to me is I don't know who I am supposed to contact. My loan was serviced by Navient and paid off during them holding the loan but it was the very last payment before it switched to Aidvantage. Aidvantage technically is my servicer now but I paid $0 to them. So who am I to contact Aidvantage or Navient because Navient is no longer in the game.

 

[Carol_]

And just like that, the plans have changed and millions of borrowers have been dropped from the program. All who are applying for debt forgiveness need to check the new rules.

A loved one told me not to finish paying off my loans in hopes of getting some of that sweet sweet forgiveness for which I am eligible…
I paid the last of the $360k on September 9th without asking for forgiveness and I’m so glad I did. The amount I might have gotten was a drop in the bucket with a ton of government red tape attached. I feared they would come back in a few years and say, “oops, for reasons x y and z you now owe us thousands of dollars due last month.” And look, it’s been days and they’re already screwing the pooch.

 

[cvjw]

It is true but not as many as one would think.

"The student loans that are guaranteed by the federal government but held by private entities account for a relatively small, and shrinking, subset of all outstanding federal student debt. They comprise just several million of the roughly 45 million Americans with federal student loans."

Either way it's really crappy to do this. As I understand it legal action concerns from the private banks were suspected to be a primary factor. So reading the various stories it was a preventative move.

Article on daily mail said 4 million dropped from debt forgiveness. But, that was just with the first lawsuit. Lots of others to come down the pike.

 

[Mackenzie Click-Mickelson]

Article on daily mail said 4 million dropped from debt forgiveness. But, that was just with the first lawsuit. Lots of others to come down the pike.

This was focused on the private held but federal loans. That is the news you were speaking about, that was the news the other posters were talking about/enquiring about. So when you said "millions" like many articles led with I was giving the background (which isn't found in all articles just some that I could find) that yes people were impacted by the very thing you were talking about but they represent a small number. Like student loan debt in general there are a multitude of situations people are in/loans held/programs they are under, etc.

 

[sksjasams]

I'm still waiting to hear on confirmation on my husband and I who paid ours off during the pause. While it's been said we're eligible (or likely eligible) it's been wishy-washy. Of particular interest to me is I don't know who I am supposed to contact. My loan was serviced by Navient and paid off during them holding the loan but it was the very last payment before it switched to Aidvantage. Aidvantage technically is my servicer now but I paid $0 to them. So who am I to contact Aidvantage or Navient because Navient is no longer in the game.

I’m not sure which servicer you would contact, but its my understanding you need to request a refund. You are allowed to request a refund of any payments made during the Covid payment pause. You would wait until those payments have been refunded and you once again have a balance, and then apply for the one time student loan debt relief. Applications are due by 12/31/2023. All this is assuming you have loans that are eligible for the program and you meet the income requirements.

 

[mefordis]

A loved one told me not to finish paying off my loans in hopes of getting some of that sweet sweet forgiveness for which I am eligible…
I paid the last of the $360k on September 9th without asking for forgiveness and I’m so glad I did. The amount I might have gotten was a drop in the bucket with a ton of government red tape attached. I feared they would come back in a few years and say, “oops, for reasons x y and z you now owe us thousands of dollars due last month.” And look, it’s been days and they’re already screwing the pooch.

Did you qualify for forbearance during covid? If so I believe you can get 10k back.

 

[barkley]

That's surprising. What kind of scholarship did they receive? My daughter has a merit scholarship which is not taxable.

Maybe it's taxable for students who got more than they needed to pay tuition?

the scholarship money has to be used for what the irs defines as qualified educational expenses and they don't nesc. mirror what an individual educational institution requires of a student financially so if a single or multiple scholarships exceed the dollar amount of what the irs will allow in a given year a student (or their parents if they are filing for them as a dependent) can find that a portion of the scholarship money is taxable (example-irs doesn't allow for room and board or mandatory health fees but the university my oldest attended requires both of first year students and their scholarships reflect that-as a result there can be many thousands of dollars in taxable money).

 

[Mackenzie Click-Mickelson]

I’m not sure which servicer you would contact, but its my understanding you need to request a refund. You are allowed to request a refund of any payments made during the Covid payment pause. You would wait until those payments have been refunded and you once again have a balance, and then apply for the one time student loan debt relief. Applications are due by 12/31/2023. All this is assuming you have loans that are eligible for the program and you meet the income requirements.

Yeah that part we've read. So far as the information as been given it's been "contact your servicer" and my initial reaction is Aidvantage because all the login information and everything transitioned over from Navient but it transitioned with a $0 balance (just my luck this would all happen this way) so I don't know if the balance would just go onto that account (I assume so).

Still waiting on more concrete information here unfortunately for how it works for people who paid during the time but also paid it off during the pause but time is coming up quick on when things are supposed to start rolling with everyone saying to apply ASAP once launched. I think we're most concerned about the process for the debt relief as we don't want to risk carrying a balance again nor for long IF that had to be that way (impacting things like credit, interest rate, etc).

 

[tvguy]

Can you please post a link? Thank you!

https://www.npr.org/2022/09/29/1125923528/biden-student-loans-debt-cancellation-ffel-perkins


A Google News search is all you need to do to check.

 

[OKbyme]

I have 3 kids all with the federal student loans. First one graduated in 2018, last one graduated this past May. All 3 also had Pell Grants, so should qualify for $20K of loan forgiveness. However, I really think this loan forgiveness program will not happen, and that will likely be announced early Dec.


On another forum, it is advised to withhold any payments for now, but bank that money to apply to the loans once they start up again.

 

[cvjw]

I have 3 kids all with the federal student loans. First one graduated in 2018, last one graduated this past May. All 3 also had Pell Grants, so should qualify for $20K of loan forgiveness. However, I really think this loan forgiveness program will not happen, and that will likely be announced early Dec.


On another forum, it is advised to withhold any payments for now, but bank that money to apply to the loans once they start up again.

I also think the loan forgiveness will not happen. This announcement is just the first - with more to come. Once the price tag was announced for the loan forgiveness, it isn’t near as popular.

 

[GAN]

I also think the loan forgiveness will not happen. This announcement is just the first - with more to come. Once the price tag was announced for the loan forgiveness, it isn’t near as popular.

Yeah..... besides, it's not really fair to those of us that put all the hard work into faking our own death and starting a whole new life just to avoid paying the loans back!

 

[JLTraveling]

And just like that, the plans have changed and millions of borrowers have been dropped from the program. All who are applying for debt forgiveness need to check the new rules.

That actually isn't true. The people who no longer qualify are those who hold FFEL loans (program was phased out in 2010). Those are guaranteed by the government, but owned by the private loan servicers. As soon as forgiveness was announced, they put out a lot of detailed information for FFEL loan holders to consolidate into a government-held Direct loan. One of the biggest reasons for not doing so was that traditionally, consolidating would restart the clock on IDR repayment plans, which forgive the loan after 20/25 years (depending on plan) of payments. But they announced a one-time adjustment for all borrowers, which among other things would allow all IDR payments on an FFEL loan to count for the new Direct loan. They kept saying that they were "working on options" for FFEL loan holders who didn't want to consolidate, but they NEVER promised forgiveness on those loans.

I had FFEL loans. I heard the announcement, I heard the information that all my previous payments would count, I heard that it was unclear whether FFEL loans would qualify for forgiveness. And I immediately applied to consolidate to a Direct loan.

Those who decided to wait took a gamble that was clearly and obviously a gamble. They rolled the dice and lost. I feel for them, but they had every opportunity to consolidate and take advantage of forgiveness just like I did.

 

[TwoMisfits]

Right now, there are enormous lawsuits from loads of affected parties winding their way through courts seeking to stop all of the loan forgiveness. The removal of the private loans was seen as a proactive attempt to save any of the executive order loan forgiveness since its legality is so questionable.

We may see more loans fall into the "not going to be forgiven" category...or all of them over the next few weeks/months.

So, as I suggested long ago when this all came up - you can count on the interest pause, but you can't count on any forgiveness ever reaching you, so plan accordingly.

 

[cvjw]

Yeah..... besides, it's not really fair to those of us that put all the hard work into faking our own death and starting a whole new life just to avoid paying the loans back!

Seems like it would be way less trouble to just pay back the loans you legally took out

 

[Carol_]

INSPIRATION for everyone… It can happen… Keep paying… After a VERY long time, I just got this email today:

 

[Mackenzie Click-Mickelson]

INSPIRATION for everyone… It can happen… Keep paying… After a VERY long time, I just got this email today:
View attachment 706772

I have to say each time I paid off a loan and got the e-mail through Navient it was a little internal

When the pause happened for a few months I paid the same payment but split it up like into the several loans just like my normal payment would be but eventually I just started paying down it 1 loan at a time paying the same amount each month and still what my normal loan payment would have been.

 

[Moliphino]

I have to say each time I paid off a loan and got the e-mail through Navient it was a little internal

When the pause happened for a few months I paid the same payment but split it up like into the several loans just like my normal payment would be but eventually I just started paying down it 1 loan at a time paying the same amount each month and still what my normal loan payment would have been.

I tackled mine based on the interest rate. Everything extra went to the loan with the highest interest rate.

 

[mefordis]

Right now, there are enormous lawsuits from loads of affected parties winding their way through courts seeking to stop all of the loan forgiveness. The removal of the private loans was seen as a proactive attempt to save any of the executive order loan forgiveness since its legality is so questionable.

We may see more loans fall into the "not going to be forgiven" category...or all of them over the next few weeks/months.

So, as I suggested long ago when this all came up - you can count on the interest pause, but you can't count on any forgiveness ever reaching you, so plan accordingly.

I think the lesson here is don't count on any money given to you unless you have it in your hand. I have been burned before when someone said they are going to give me a monetary gift and it never materialized. I learned long ago to take any promises with a grain of salt.

 

[Mackenzie Click-Mickelson]

I tackled mine based on the interest rate. Everything extra went to the loan with the highest interest rate.

Mine were all about the same give or take a bit, looking it over it wasn't as important whereas my private loans there's a larger difference interest rate (about 3% difference between the two and unfortunately are impacted by things like a Federal increase on interest rates even though I've never missed 1 payment ever).

Looking over the payoff dates though I did pay off the only Unsubsidized loan first however that was a loan that originated during my senior year of college. I don't know (it's hard to look up documents now since the pause) if that had the most interest in terms of percentage but it was accruing while I was in college (unless I had paid during that time which I didn't) vs the 4 other subsidized ones only were when they passed the initial deferral part.

It is smart though if you've got that difference to do what you did.