Tag: Income-driven repayment plans

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

The Costs of Deferring Your Student Loans

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Many Americans are struggling to pay back their student loans.  According to a recent study, 30 percent of direct loans are in deferment.  When a borrower defers a student loan, temporarily suspending repayment due to unemployment or other financial hardship- the interest on the loan continues to accrue.  If no payments are made during the deferment period, the interest will capitalize and be added to the total amount of the loan.

Interest rates are expected to rise in 2018.  Undergrads will pay 4.45 percent on loans distributed from July 1, 2017 to June 30, 2018, which is up from 3.76 last year. There are limited time frames for how long a loan can be in deferment.  Deferring your student loans can also eliminate your eligibility for certain public forgiveness programs.

Deferring your student loans can be costly.  Here are some alternatives:

  • Utilize income-driven repayment plans offered by your lender;
  • Refinance your student loans;
  • See if your employer offers loan assistance to employees;
  • Forbearance, which suspends student loan payments is typically at the loan holder’s discretion. These specific qualifications are detailed on the government’s Federal Student Aid

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For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Bankruptcy Law, Debt Relief, Student Loans, Timothy Kingcade Posts

Tips for Avoiding Student Loan Repayment Traps

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Know your loans. Check copies of your FREE credit report from the three major credit bureaus via annualcreditreport.com if you think you may have lost track of a loan, as lenders will almost always report the existence of the loan to the bureaus.  For federal loans, check the National Student Loan Data System.  Always know how much you owe, and to whom.

Know your options when it comes to income-driven repayment plans. If you have federal loans, you may be eligible for a payment plan that allows you to submit information based on your income and family size and then reduce monthly payments to amounts that are affordable for you.  Here is a list of Income-Driven Repayment Plans available through the Education Dept. and answers to frequently asked questions.

Stay Informed. Signing up for an income-driven repayment plan is not enough. You have to re-qualify each year with updated financial information.  Do not trust your lender to do this for you. The consumer bureau recently accused Navient, the largest student loan servicer in the U.S., of not properly informing borrowers of this fact or of crucial deadlines. As a result, many borrowers saw their payments jump, leading to numerous late payments and additional interest and fees.

Avoid Forbearance. If you are having trouble making your monthly payments, your servicer may offer you something called a forbearance, which essentially allows you to reduce or even eliminate payments for a period of time.  The downside: The loan’s interest keeps piling up.  Recently, Navient was charged with steering borrowers into forbearance when they may have had better options, such as income-driven repayment plans.

For borrowers who are struggling with student loan debt, relief options are available. Many student loan borrowers are unaware that they have rights and repayment options available to them, such as postponement of loan payments, reduction of payments or even a complete discharge of the debt. It is important you contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources:

https://www.nytimes.com/2017/01/20/your-money/6-tips-for-avoiding-the-worst-student-loan-repayment-traps.html?src=me&_r=0