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

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

Student Loan Assistance Companies on Notice Now for Inflating Repayment Plans to Get $0 Payments

A long implemented trick by some student loan assistance companies has been to tell consumers they can inflate the number of people they support in order to reduce the monthly payment on Income-Drive Repayment (IDR) Plans. Consumers have reported and I’ve covered stories where sales representatives of student loan assistance companies, sometimes pretending to be … Read more

I’m in Law Enforcement And Getting Nowhere With My Federal Student Loans

Question: Dear Steve, I graduated college in 2007. After years of financial hardships and the lack of knowledge of student loans and deferments/forbearances, my loan and interest has risen to $66,000 at a 7.4% interest rate. I’ve tried getting lower rates with negative results. I apply for IBR which brings my monthly payments from about … Read more

Alternative Repayment Plan – The Little Known Federal Student Loan Plan When All Else Fails

For individuals struggling to repay their federal student loans and think the only repayment options are a Graduated Repayment Plan, Extended Repayment Plan, Revised Pay As You Earn, REPAYE, Pay As You Earn, PAYE, Income Based Repayment Plan, IBR, Income Contingent Repayment Plan, ICR, or Income Sensitive Repayment Plan. For Direct Loans there is also … 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

My College Loans From 1994 Keep Increasing. I’ll Never Pay Them Off.

Question: Dear Steve, I graduated college in 1994 with $21k in federal student loan debt. Long story short, 23 years later, after several deferments, forbearances and start and stop payments due to different financial circumstances, I now owe over $108,000!! What can I do? Is there any chance of a settlement or partial forgiveness? Pat … Read more

Navient Feels Like a Modern Day Mafia to Us

Question: Dear Steve, Took out Federally backed Student loans with Sallie Mae 20 years ago after a divorce. Had to use deferments due to job losses and health issues. Borrowed around $75,000 for three degrees. Due to the delayed interest from the deferments I now owe $126,000. I am now in retirement at 69 years … Read more

I’m Graduating With a PhD and Student Loans I Can’t Afford

Question: Dear Steve, I’m currently a full-time PhD student at a very reputable university who is entering what is hopefully the final year of graduate school. While I’ve been fully funded all of my years here, the stipend has never been enough to help me pay down any of my loans from previous undergraduate and … Read more

Obama Proposes Tax Help for Student Loan Relief. Congress Says No.

In the budget the Obama administration has just sent to Congress there are some benefits for students who will face massive tax bills when their student loans might be forgiven under income based programs. As it stands now, students are enrolling in income driven repayment programs to reduce their current monthly payments to a level … 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

New Obama Student Loan Proposal – Swing and a Miss

Yesterday President Obama made an announcement that a good federal student loan repayment program would be expanded to allow up to five million more people to take advantage of Pay As You Earn (PAYE). Certainly on face value it seems like a grand advancement and it is a small step in the right direction but … Read more

Obama Pay As You Earn Student Loan Forgiveness Program Details

The final rules and guidelines were released yesterday that can finally give us some guidance on a government student loan repayment program that can make it easier for many people. The Pay As You Earn program will provide much needed relief to more people that are drowning under a trillion dollars of student loan debt. … Read more