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?).
(Note: This week’s questions and answers were originally published on Reddit.)
Double Dipping On Repayment Benefits
I am about 2.5 years into income-based repayment and just got a job eligible for education debt reduction program (EDRP). Will accepting EDRP disqualify me from PSLF? To me, it seems a lot like double dipping. I did a good bit of reading but found no answers, so thought I’d ask here.
This is a great question, as many of the loan forgiveness programs don’t allow “double dipping.” The good news is that nothing in the statute would prevent you from receiving both. The Higher Education Act states (in regards to PSLF eligibility) that, ‘‘(4) INELIGIBILITY FOR DOUBLE BENEFITS.—No borrower may, for the same service, receive a reduction of loan obligations under both this subsection and section 428J, 428K, 428L, or 460.’’The mentioned citations refer to Teacher Loan Forgiveness and two programs that aren’t funded anymore (forgiveness for work in areas of national need and for legal assistance attorney’s).
For clarification, you actually can receive both Teacher Loan Forgiveness and Public Service Loan Forgiveness—just not for the same work period. So, you could work in an eligible teaching position for 5 years and receive TLF, then work another 10 years and receive PSLF. With that said, it doesn’t make a lot of sense to do this, unless you’ve already received the TLF benefit and still have a balance on your loans.
Can I Keep The Money?
I’m in my third year of school. Have lived three different addresses for 3 years. My financial aid gets royally screwed up this. Go the first 6 weeks of college with no financial aid. Check gets sent to my address finally. My previous two addresses, which should not be on file (I formally changed my mailing address with the college, hence me getting a check) also get sent checks, each for slightly different amounts. Because I have friends at each previous address, I get them forwarded to me. I think the safe bet is to assume that if I cash them I’m screwed, but what are the odds that I just received free money? Has anything like this happened to anybody else?
The school will figure it out and eventually demand the money back. If you don’t pay within 30 days, the money automatically goes into default; it’s called ineligible borrower claim. Frankly, I’d be surprised if the school hadn’t already put a stop payment on the earlier checks.
While we’re here, make sure your loan holders and the school have a current address for you. If your loan should go into repayment, even incorrectly, and you miss those notifications, it could drastically affect your credit score and cause a lot of headaches and fees to get it sorted out. Ultimately, it’s considered the borrower’s responsibility to ensure the loan holder and school has his or her correct address and loan status.
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.)