Helping people understand student loans is our job at SALT™, and few are better at it than Betsy Mayotte—the director of regulatory compliance for American Student Assistance® (our parent company). We told borrowers to “Just Ask” her questions, so check out her answers below (as well as her cat—because if Piglet can’t make student loans better, what can?).
Consolidating Parent And Student Loans
Is it possible to consolidate all of my loans—including Parent PLUS loans—into one single loan in my name? My problem is that I can’t handle the weight of both the loans in my name and those in my parents’ (who expect me to pay the loan) name. If I could centralize the payment into one single loan and extend the term, things would be much easier!
I’m afraid you cannot add your parents’ loans under your name via consolidation or any other method. Perhaps you can ask them to consolidate the PLUS loan themselves, which would give you the benefit of the extended term and, therefore, lower payment. You could then consolidate your own loans to get the same result.
In the end, it’s likely you’d end up with a similar payment amount in total as you would if it were a single consolidation. Unfortunately, you’d still have two bills to take care of every month.
Loan Forgiveness Options For Teachers
My wife and I consolidated our loans in 1997. Our interest rate is 8.25%. Of course, we cannot refinance/reconsolidate again, as the student loan rules do not allow it unless we take out additional loans. I have been teaching in a public school system for 15 years that meets the requirements to have some loan forgiveness, but I have been told I do not qualify because my loans were taken out before a certain date. Isn’t there anything I can do? Our loan still sits at about $67,000. Cannot refinance, and can get no relief even after 15 years in a city school system whose population meets the requirements, and because of the economy, salaries have been frozen or given a 1%-2% increase in salary. Something has got to give.
Thanks. Frustrated Teacher.
I can certainly understand your frustration. You have the bad luck of having loans too old for Teacher Loan Forgiveness (only borrowers with no loans older than 10/1/1998 are eligible), and because you have a spousal consolidation loan, you cannot re-consolidate into the Direct Loan program to try and take advantage of the Public Service Loan Forgiveness program. I may have some ideas for you, though.
First, you might want to consider applying for income-based repayment. This plan keeps your payments at no more than 15% of your income minus an allowance for family size. Depending on what your combined income is, this could reduce your payments. After 25 years on this plan, any remaining balance would be forgiven.
You may also be eligible for some other, non-federal forgiveness programs. We just published an eBook of all the student loan forgiveness programs we could find—there are quite a few for teachers, especially on the state level. Might be worth checking out
Hope this helps you. I completely understand where you are coming from. My mom was a teacher for 30+ years, and she didn’t go into for the money, that’s for sure (as most don’t)! When she retired 7 years ago, her salary wasn’t anywhere near what one would expect for someone with her years of service and level at her school.
Have a student loan question you need an answer to? Just Ask.
(Note: The questions and answers above are real; however, they have been edited for grammar and clarity, but not by Piglet.)