PSLF now expanded to FFELP loans

[drmka26]

Anyhoo, by the lack of traffic on this thread, I assume we are in the minority of folks here on WCI/forum who still have loans that we are paying off that were issued >10 years ago. I will bend over and accept the flogging of shame that we didn't live like a resident for 3 years post fellowship and knock these suckers out 7 years ago.

yeah... F* that philosophy. Private banks, car companies, CEO etc etc making millions of dollars all take government hand-outs so I have ZERO shame in taking advantage of these schemes.

[pedsmd]

I posted about this in another thread so sorry for doing that when this is here. I have a few questions about this.

Here's my situation. I have about 80k in consolidated FFEL loans (type J on the student aid.gov website). Navient is my servicer. I've been making payments for 15 years and have been working at a nonprofit employer for the same.

From what I understand there are 2 steps. 1 consolidate for direct loans. 2. claim PSLF.

Here are my questions:

Do I do the consolidation through student aid.gov or through Navient? I looked at the link below on student aid and it based the direct loan interest rate on my initial interest rate (3.8) and not my current rate 2.25. This is moot if they're all being forgiven right?

What's the time frame? I consolidated my student loans back in the day so I don't remember. Once you do the direct loan application how long to get approved? Do you immediately file PSLF and then they vanish or does that take time?

How do I provide proof of the 120 payments? I receive emails to download monthly statements but I do not download them monthly (why would I?) On the site you can download a list of payments.


EDITED TO ADD:

I called the federal loan folks and they provided some answers. They said that once you consolidate to a direct loan it can take 3-6 months for PSLF to go through. They said additional payments are considered overpayments. However they're not sure with the new rule how additional payments are counted. Here's my question. I've made more than 120 payments to Navient. Will those additional payments be refunded as well?

Yes, I saw this notice yesterday. Huge news for those of you with FFEL loans or consolidated them in the past to direct federal consolidation loans and had your payment history erased.

Now you can retrieve the past payment history which has been erased on those FFEL loans.

Here's how to qualify those payments

Borrowers With At Least One FFEL Program Loan, Federal Perkins Loan, or Certain Other Federal Student Loan


Who’s in This Group

You are part of this group if you have outstanding FFEL and/or Perkins loans, even if you also have outstanding Direct Loans.

How to Qualify

Consolidate your FFEL Program loans and Perkins Loans into a Direct Consolidation Loan by Oct. 31, 2022. This is important, because you cannot receive credit for payments under this limited-time period if you consolidate after that date. After the consolidation is complete, you must then submit a PSLF form to your loan servicer.

Next Steps

• Verify your loan types in your Aid Summary.
• Verify eligible employment by completing Step 1 of the PSLF Help Tool.
• If an employer is eligible and you have at least one loan that is not a Direct Loan, request a Direct Consolidation Loan by Oct. 31, 2022.
• Submit a PSLF form with the PSLF Help Tool by Oct. 31, 2022.

After completing these steps dig up old records of payments you made on your FFEL loans and Perkins loans and have that on hand to make sure the servicer correctly adds up all past payments you've made.

[Andrew StudentLoanAdvice]

I posted about this in another thread so sorry for doing that when this is here. I have a few questions about this.

Here's my situation. I have about 80k in consolidated FFEL loans (type J on the student aid.gov website). Navient is my servicer. I've been making payments for 15 years and have been working at a nonprofit employer for the same.

From what I understand there are 2 steps. 1 consolidate for direct loans. 2. claim PSLF.

Here are my questions:

Do I do the consolidation through student aid.gov or through Navient? I looked at the link below on student aid and it based the direct loan interest rate on my initial interest rate (3.8) and not my current rate 2.25. This is moot if they're all being forgiven right?

What's the time frame? I consolidated my student loans back in the day so I don't remember. Once you do the direct loan application how long to get approved? Do you immediately file PSLF and then they vanish or does that take time?

How do I provide proof of the 120 payments? I receive emails to download monthly statements but I do not download them monthly (why would I?) On the site you can download a list of payments.


EDITED TO ADD:

I called the federal loan folks and they provided some answers. They said that once you consolidate to a direct loan it can take 3-6 months for PSLF to go through. They said additional payments are considered overpayments. However they're not sure with the new rule how additional payments are counted. Here's my question. I've made more than 120 payments to Navient. Will those additional payments be refunded as well?

Correct on next steps. Consolidate, might need to file another PSLF form, get PSLF.

Here's the consolidation link its on studentaid.gov.

Moot point on interest, yes it will rise slightly from consolidation but doesn't matter since its being forgiven

Since you've already reached 10+ years of payments I'd assume this takes a few months since there's going to be a significant backlog of people doing the same as you.

You provide proof of payments by sending them the employment certification forms at your qualifying employer, then they should be able to reconcile it with payments they've received from you. But, i'd just pull a couple of annual bank statements and identify your student loan payments in case they come back with issues.

Any payments you've made above and beyond the 120 will be rebated to you. But make sure you've kept a count of how many. They might mess this up and you don't want them missing any extra payments you've made.

[Slideways2]

Andrew StudentLoanAdvice
Question on this topic:
I have 425k in direct med school loans through FedLoan, going for PSLF, have about 60 payments on these. With my attending salary, I am on REPAY which is the maximum 10-year repayment, roughly $4400/mo. I still will get about half of it forgiven when I reach 120.

I also have undergraduate loans I have been chipping away at with very low interest rate. Of those loans, $28k is Stafford/FFELP and a small amount is Private. If I get credit for the FFELP payments, I am also about 60 payments into PSLF if I choose that route.

My question is, if I do a Direct Loan Consolidation on the Stafford / FFELP loans, will these roll over to FedLoan or the same servicer that I am already using for PSLF? Or is it anyone's guess as to which servicer the package of FFELP loans goes to? I ask because combining the balance of $425 direct + $28 in FFELP consolidation would be $453k and I would stand to benefit from PSLF. If however it goes to another servicer or even goes to FedLoan and is seen as a separate account, will I be making a separate monthly repayment on REPAYE again at the 10-year standard repayment rate?

Thanks

[Andrew StudentLoanAdvice]

Slideways2

If you complete a direct federal consolidation and fill out a PSLF cert form for those loans, those loans would also be moved to FedLoan. But, with FedLoan quitting loan servicing, they still haven't announced which loan servicer will do PSLF for borrowers.

Your medschool and newly consolidated undergrad loans wouldn't be a separate accounts. Your payment wouldn't change. Here's an explanation how your payment would be applied.

Medschool Loans = $425k
Undergrad Loans (newly consolidated) = $28k
Total Loan balance = $453k.

Your $4,400 monthly payment would be allocated as such
$425k/$453k = 94% * $4,400 = $4,136
$28k/$453k = 6% * $4,400 = $264

Federal loans aside, if your private student loan isn't under 3% interest rate, you should private refinance it. Bet you could get a better rate.

[Slideways2]

Slideways2

If you complete a direct federal consolidation and fill out a PSLF cert form for those loans, those loans would also be moved to FedLoan. But, with FedLoan quitting loan servicing, they still haven't announced which loan servicer will do PSLF for borrowers.

Your medschool and newly consolidated undergrad loans wouldn't be a separate accounts. Your payment wouldn't change. Here's an explanation how your payment would be applied.

Medschool Loans = $425k
Undergrad Loans (newly consolidated) = $28k
Total Loan balance = $453k.

Your $4,400 monthly payment would be allocated as such
$425k/$453k = 94% * $4,400 = $4,136
$28k/$453k = 6% * $4,400 = $264

Federal loans aside, if your private student loan isn't under 3% interest rate, you should private refinance it. Bet you could get a better rate.

Thank you, Andrew. I was a bit concerned because when I went to StudentAid. gov , it asked me it gave me the option to consolidate EVERYTHING (all 9 direct loans plus the 4 FFELP loans) versus only checking individual ones. I just checked the 4 FFELP loans since the direct loans are already in a Direct Loan Consolidation program with FedLoan (for now). I guess it is moot whether I select the 4 FFELP loans or everything. My fear was that they'd see that I am re-consolidating my already consolidated Direct Loans and then the count goes back to zero.

[Andrew StudentLoanAdvice]

Either way you do it, it should be fine. I'd probably just consolidate the FFELP loans though to keep them separated in case you had more qualifying payments on those or the direct consolidated loans.

Remember they have changed the rules on us with this limited waiver.

"Under the new rules, any prior payment made will count as a qualifying payment, regardless of loan type, repayment plan, or whether the payment was made in full or on time. All you need is qualifying employment."

Which leads me to believe even if you completed direct consolidation on direct stafford loans or direct federal consolidation loans, you wouldn't have your payment history erased like it was in the past.

[wa2106]

Is there any information on whether the new rules apply to making payments on unconsolidated Stafford loans?

[Andrew StudentLoanAdvice]

Is there any information on whether the new rules apply to making payments on unconsolidated Stafford loans?

If you made a partial payment or made a late payment on your loans, those would also count.

[drmka26]

My loans say they are in deferment since Mar 2020 - the beginning of the pandemic relief on FedLoans website. Is that what everyone else is seeing? Will the payments automatically resume at old rate on Feb 1, 2022?

[goldenchimpy]

Just want to throw this out there in case it helps anyone who is now planning on doing PSLF.

If you’ve made any payments during the covid pause you can request a full refund. This would allow you be able to get a bit more forgiven.

[JB14]

My loans say they are in deferment since Mar 2020 - the beginning of the pandemic relief on FedLoans website. Is that what everyone else is seeing? Will the payments automatically resume at old rate on Feb 1, 2022?

If you see that, you don't have FFEL loans, as they were not paused in March 2020. You must already have Direct Loans.

[CharlieBrown]

Starting to look at the process for the PSLF waiver. For the last 9.5 years, I have been making payments on a 30 year repayment schedule with a low interest rate. I understand that all payments, regardless of repayment plan will count. First step would be to consolidate my FFEL loans currently at Navient. While working through the consolidation forms online, it gives several options for repayment - standard, graduated, income-contingent repayment, etc. These have large differences in monthly payments. Does it matter which one?

[Andrew StudentLoanAdvice]

Starting to look at the process for the PSLF waiver. For the last 9.5 years, I have been making payments on a 30 year repayment schedule with a low interest rate. I understand that all payments, regardless of repayment plan will count. First step would be to consolidate my FFEL loans currently at Navient. While working through the consolidation forms online, it gives several options for repayment - standard, graduated, income-contingent repayment, etc. These have large differences in monthly payments. Does it matter which one?

Pick the lowest monthly payment offered in a qualifying repayment plan.

Here's your options:
Standard 10 yr
REPAYE
PAYE
IBR
ICR

[Andrew StudentLoanAdvice]

My loans say they are in deferment since Mar 2020 - the beginning of the pandemic relief on FedLoans website. Is that what everyone else is seeing? Will the payments automatically resume at old rate on Feb 1, 2022?

Yes, that's what shows up for everyone who has direct loans.

Payments are resuming in February and in March for some at the old interest rate.