This FREE site is designed to help parents and college students
understand their rights, responsibilities and student loan consolidation
options. We explain loan consolidation repayment plans and incentives. We also
cover deferment and forbearance issues plus how to avoid, prevent or
stop collection and garnishment actions. Finally, we explain how to
get PLUS student loans in default cancelled, how to go about disputing
defaulted student loans and, for parents of undergraduate students,
where to Borrow 100% of the cost of your child's college education!
Virtually all federal student loans are eligible for
consolidation! Even if your loan is in default you may still qualify
for student loan consolidation. Also, lenders may not refuse to
consolidate your loans because of the number or type of loans you want to
consolidate, the type of school you attended, or the government mandated low
interest rate and repayment schedules. The only exception to eligibility is if
a judgment or wage garnishment is already in place.
WARNING: The statutue of limitations on
defaulted student loans was eliminated by the Higher Education Act.
Section 484A removes all limitations and gives the Department of Education or
the guaranty agency (bank or lender) the ability to file suit, enforce
judgments, initiate offsets, or other actions, to collect a defaulted student
loan regardless of the age of the debt. Statutes of limitation are no
longer valid defenses against repayment of a student loan.
No Fees: You will not be charged any
application fees or prepayment penalties when consolidating student loans!
No Credit Checks: Consolidating student loans
is a FREE government program that does not require credit checks. (Exception:
PLUS borrowers are subject to a check for adverse credit history.
Payback Period The payback term ranges from 10
to 30 years, depending on the amount of education debt being repaid and the
repayment option you select. Your other education loans not included in the
consolidation loan are considered in determining the maximum payback period.
Interest Rates: Federal statute sets the
interest rate on consolidated student loans at NO HIGHER THAN 1/8th of a
percent more than the effective rate on your individual loans fixed for the
life of the loan thus, you are protected from future increases in variable rate
loans!
Repayment Options:
There are three basic repayment options for consolidation
loans:
- Level-repayment - equal-installments;
- Graduated repayment - increases over time; and
- Income-based payment plans - increases/decreases based on
income.
Repayment Incentives
Repayment incentives come in the form of lower interest rates
and/or rebates and are based on your on-time repayment history and payment
amount. Higher payments mean sooner payoff which equals better
incentives.
Tax Credits*
Two federal income tax credits—dollar-for-dollar
reductions in tax liability—are available for higher education expenses.
The Hope tax credit, worth up to $1,500 per student, is
available to first and second year students enrolled at least half time.
The Lifetime Learning tax credit is equal to 20 percent of a
family’s tuition expenses, up to $5,000, for virtually any post-secondary
education and training, including subsequent undergraduate years, graduate and
professional schools, and even less than half time study.
Also, interest on student loans might be tax
deductible!
Note 1: .
Beginning with tax year 2002, you may deduct interest paid beyond the first 60
months of repayment. For details or assistance contact a qualified tax adviser
or the Internal Revenue Service at http://www.irs.gov
Note 2:
Married couples may consolidate their student loans into one payment
however, they become jointly and severally liable for repaying the entire
consolidation balance, even in the event of divorce, death or total and
permanent disability of a spouse. Consider this option carefully!
Note 3: For more
information on the Hope and Lifetime Learning tax credits, visit
www.ed.gov/updates/97918tax.html or see the IRS Publication
970, view or download the publication from the Internet at
www.irs.gov/prod/forms_pubs/ Interest