Get Strategic And Stop “Throwing Money” At Your Loan Payments

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Piglet being held by vet

You have to have a strategy. You better believe Pig has a plan to get out of the vet’s clutches!

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?).

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Student Loan Repayment Strategies

I am married. My wife has student loans as well. I work full time ($72k/year) as an engineer. She is a registered dental hygienist that currently works part time ($40k/year). I have close to $110k in private and federal loans. She has around $40k. I pay around $930/month. She pays around $500/month. We definitely need some help in lower our payments and just overall payback planning. We are just throwing money at the loans each month hoping they will subside. We have done research on around 60 programs, but it seems as if we do not qualify for any of them.

Any thoughts or suggestions would be appreciated. Thanks.

A good strategy would be to get your federal loan payments down as low as possible then pay off the private loans first.

I would consolidate the federal loans into the Direct Loan program at www.studentaid.ed.gov (you will have to do so separately); then both of you should file for income-based repayment. You will need to ensure they know that you both have loans, so they will determine both your payments on both your federal loan balances and income.

If that doesn’t lower your payments so you can devote more to the private loans, you can try other lower payment options. SALT™ members (it’s free to sign up) can compute the payment under all the plans with our Repayment Navigator.

Check that out, then let me know if you have additional questions

PS: By 60 programs, should I assume you’ve reviewed our forgiveness eBook? If not, you can find that at saltmoney.org too!

Loan Forgiveness For Public Service Employees

Hello, I have been working in public services for well over 10 years. Are there any programs that I can apply for related to partial or total loan forgiveness?

There are a lot of variables that would dictate whether you were eligible for any forgiveness programs. Whether you have federal or private student loans, when they were taken out, what kind of work/who you work for. You should take a look at the eBook I mentioned in the previous question—and check out Public Service Loan forgiveness in particular.

Let me know if you have any questions along the way.

Changing The Name On Parent PLUS Loans

I am currently in repayment for the Parent PLUS loan my father took out for my education. Because the loan is under his name, what is the best option to transfer or consolidate it with my own federal and state loans? Is this even possible?

I get this question often, as many families have similar agreements between the student and the parent regarding college expenses.

I’m afraid there’s no way to transfer the Parent PLUS loans into your name other than by taking out a personal loan from your bank or using a credit card. I strongly recommend against either of these options. Not only will the interest rates be much higher than you are currently paying, but you will also lose all the protections available for federal student loans.

The other difficulty in these situations is that any lower payment or deferment options are based on the borrowing parent’s situation—rather than the paying students.

I’m sorry I didn’t have better news for you, but let me know if you have other questions.

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.)

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