Income-Driven Repayment Programs for Federal Student Loans are a Mess

Income-Driven Repayment Programs for Federal Student Loans are a Mess

The Government Accountability Office (GAO) has just published a report examining Income-Driven Repayment (IDR) programs and how they are being managed. The findings are not encouraging. The Department of Education approved forgiveness for a total of 157 loans under Income-Driven Repayment (IDR) plans as of June 1, 2021, but has not taken the steps necessary … Read more

Almost Nobody Has Has Their Student Loans Forgiven Under an Income-Driven Repayment Plan

A couple of weeks ago Rodger asked me how many people have actually completed an Income-Based Repayment plan. I didn’t know the answer so I went and asked the Department of Education and surprisingly they got back to me relatively quickly. Don’t Be Shocked As of January 27, 2020, there have been 19 people that … Read more

How Many People Have Student Loans Forgiven Under the Income-Based Repayment Plan?

Question: Dear Steve, I have been trying to find out how many people have actually completed an Income-Based Repayment plan because the Dept of Education always argues this in an adversary proceeding. Any idea on how many people there are who have actually completed it? Rodger Answer: Dear Rodger, Nobody. Nada. Zilch, Zero. The Income-Based … Read more

Bankruptcy Groups Jump In to Support Student Loan Discharge to Avoid Cement Life Preservers

The National Consumer Bankruptcy Rights Center (NCBRC) and National Association of Consumer Bankruptcy Attorneys (NACBA) have decided to support the bankruptcy discharge in ECMC v. Murray with an outside briefing supporting the effort. The Murray case is very interesting in that the bankruptcy court agreed a substantial part of their student loan debt should be … Read more

Income-Driven Repayment Plans for Managing Crushing Levels of Student-Loan Debt: Financial Suicide

By the end of his first term in office, President Obama knew the federal student loan program was out of control. Default rates were up and millions of student borrowers had put their loans into forbearance or deferment because they were unable to make their monthly payments. Then in 2013, early in Obama’s second term, … Read more

Income-Driven Repayment Plans for Distressed Student-Loan Debtors: Not a Silver Bullet for Easing the Student Loan Crisis

by Richard Fossey & Robert C. Cloud. The federal student loan program is in crisis. More than 40 million Americans now have outstanding student loans totaling almost $1.3 trillion and 8 million borrowers are in default (Cao, 2016). As reported recently by the Brookings Institution, in the for-profit college sector, default rates are especially high. … Read more

Income-Driven Repayment Plans for Distressed Student-Loan Debtors are Insane

In a recent post, I wrote about Alan and Catherine Murray, who won a partial discharge of their student-loan debt in a bankruptcy case decided in December 2016. Educational Credit Management (ECMC), the creditor in their case, is appealing the decision. We should all hope ECMC loses the appeal, because the Murrays are the poster … Read more

I Just Finished a Chapter 13 Bankruptcy But Have Parent PLUS Student Loans and National Collegiate Student Loan Trust

Question: Dear Steve, Just got out of Chapter 13 Bankruptcy (finished all five years faithfully). NOW am getting tons of student loan (Parent Plus) for my two kids. I lost my job over a year ago and was forced to take early social security at 62. Could NOT find a job I could do. I … Read more

My Parents Have a High Income But Struggling Under the Parent PLUS Payments

Question: Dear Steve, When going to school for my undergraduate degree, I was denied any federal aid or grants because of my parents’ income being too high. However, they were (and still are) in an extreme amount of debt and were extremely close to losing their house and declaring bankruptcy. Because of this, I was … Read more

I’m a Retired Teacher and I’d Like to Lower My Parent PLUS Loan Payments

Interest rate negotiation can result in a lower interest rate than you are paying now.

Question: Dear Steve, I am a retired teacher. I was told that I could consolidate the parent plus loans I have and then get an income contingent repayment plan. 1. Does my credit need to be good to consolidate my loans 2. The article I read said a requirement is to be employed. Does that … Read more

I’m Taking the Tax Benefit for My Father’s Parent Plus Loan

Question: Dear Steve, I am in debt for around $100k from going to a private design school in Nebraska. I owe around $20k in Fedloans and $80k in Parent Plus loans that my dad signed for. I am paying I consolidated all of my loans as much as I could and opted for the lowest … Read more

They Raised My Payment on My Parent Plus Loan Consolidation

Question: Dear Steve, Around 2002/2003 I took my first of 5, (I believe 5) parent student loans. I am a public servant and some of the loans were private. I applied for the loan forgiveness program and Fedloan is my servicing loan provider. They advised me to consolidate the loans to qualify for the IBR … Read more

I’m a Teacher. How Can I Lower My PLUS Loan Payment?

Question: Dear Steve, My student loan (originally taken out for my children) is now owned by the government and administered by The loan is in my name alone — my wife is not on the loan. 1. Does filing separately exclude my wife’s income from consideration in an IBR? When I started with … Read more

There’s a Catch to Income-Based Repayment That Could Cost You Money

When it comes to dealing with student loans it can be a good news-bad news situation. While there are some good options to dealing with student loans when you can’t afford the payments, not all loans are the same. Federal student loans have a number of repayment options while private student loans tend to be … Read more