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Student Loan Forgiveness Program To Be Cut???

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Has anyone seen this news story floating around the interwebs?

The headline reads: “Trump to Propose Scrapping Beleaguered Student Loan Forgiveness Program.” It’s got a big picture of Betsy DeVos face floating around with the headline.

In the story, reporter Jillian Berman discusses how a leaked education budget shows plans to eventually chop the Public Service Loan Forgiveness program (PSLF). Its not a sure thing. The budget plans are not yet finalized and, even if they were, it would require Congress’ approval.

I’ve seen lots of panic and political drama surrounding it on Facebook. My mom tagged me in one such post to get my thoughts on the issue.

And here I am, sitting on the sidelines. I graduated with nearly $100,000 in student loan debt (now sitting right at $65,000 – latest debt update here). I’m taking the position that I’ve never wanted to depend on any of the government loan forgiveness programs. For many years – long before Trump took the presidency and appointed Betsy DeVos as Secretary of Education –  I’ve been saying that I didn’t trust these government programs. I’ve always maintained the position that I don’t want to depend on the government and that the PSLF program (or any of the loan forgiveness programs) could ultimately just disappear one day. I don’t want to make major career decisions on the basis that I need to go into this field or work for that sector in order to qualify for PSLF because WHAT IF the program ends up discontinued?? Then what? Where would that leave me? Up shit creek with no paddle, that’s where!!!

Instead, I personally have always taken the view that I just want to PAY OFF my loans as quickly as possible. Don’t get me wrong – I have nothing against the loan forgiveness programs. If I were already on a career-trajectory where I intended to be in public service I would certainly be looking into it – I just don’t want to force myself down that road simply for the hope of possible loan forgiveness at the end of it. Actually, I’m on an income-based payment plan where any unpaid interest on my subsidized loans has been forgiveness. It’s not loan forgiveness (it’s only interest forgiveness…and only on some of my loans), but it’s a related student loan program and I’m taking 100% advantage of it while I can. But in terms of the major government-backed loan forgiveness programs (like PSLF), they have never sounded like appealing options for me.

What are your thoughts on the controversy? Is anyone signed up for the PSLF program that would be directly impacted if it were to be discontinued? How scary!


You Told Me So

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When we were going through the process of getting a mortgage, we shopped around with a lot of different lenders and ended up with a company that we were…luke-warm about after it was all said and done.

The experience, itself, wasn’t exactly pleasurable. I know it’s stressful anytime you buy a house, etc. etc., but there were some things I didn’t share that were really frustrating. But the one GREAT thing this lender had that no one else could compete with was a stellar interest rate. We got our loan at a 2.75% APR!!!

At that time, a handful (maybe 2 or 3?) of commenters mentioned the option of perhaps rolling some of our student loan debt into the house. Our loan was for well below the appraisal price of the home, so this could have been an option (note: not for all the student loans, but a portion of it).

Hubs and I talked about it and decided against it. Ultimately, we both just felt a little “yucky” at the thought of rolling student loan debt into the house. It just didn’t sit right with us and we took that as a sign that we should probably do something different. The plan was always to look into student loan consolidation companies after the mortgage went through.

When the mortgage was finally funded in early November, I started shopping around just a couple weeks later.

First I was denied by a place. (update: the “negative mark” was, indeed, my delinquent account I’d mentioned in this post. It’s old enough that it should be off my report – and it has, indeed, fallen off of 2 of the 3 credit agencies, but it’s still sitting on the third. I’ve completed a formal dispute so hopefully this will be rectified soon).

And then I discovered that other places really couldn’t offer better rates at all! Here’s a sampling of rates that I was offered:

6.99%

6.49%

5.37%

My current student loan interest rates range from 5.8 – 6.5, so there’s not even really much of a savings compared to what I currently pay.

And now I just kind of feel foolish. I feel like I should have listened to YOU and put some of that student loan debt in with the house debt. Ugh! I guess hindsight is 20/20, right?

This has stalled plans a bit in regard to the student loan consolidation. I’m just not crazy about a 5.37% APR. Yes, it’s lower than my current interest rate. But is it low enough to go through all the paperwork hassles and the fact that I’d now have one GIANT loan instead of multiple, smaller loans to tackle?

I don’t know.

And, that must be balanced against the fact that I truly despise our current lender, Navient.

Again, I just don’t know.

I’ve been doing these balance transfers on a credit card I don’t use. It has a limit of $7,500 and allows me to do balance transfers at a 0% APR for 12 months at a 3% initiation fee (note: this is the current “deal” as of today. In the past, I’ve been able to score as low as a 2% initiation fee, but for a shorter amount of time – I believe 6 months; That “deal” isn’t showing up anymore so it may have been discontinued).

Anyway – that’s the best rate I can get. But that’s only $7,500 at a time and I still have a MOUNTAIN of debt to contend with (most recent debt update here).

So I’m kind of at a loss. Here’s what I’m thinking in terms of a plan moving forward (though I’d love to hear your thoughts, too, so please chime in!):

  • I’ll keep all the subsidized loans with Navient (I’m receiving forgiveness on unpaid interest through August). I’ll pay minimums on those to reap the interest-forgiveness benefits.
  • I’ll continue doing these balance transfers to reap the benefits of the lower interest (with the note that I’m always EXTRA CAREFUL to ensure they are fully paid off by the deadline so I don’t get hit with penalties and sky-high interest). As each balance transfer is paid in full, I plan to continue to initiate new transfers up to the $7,500 limit as allowed.
  • Finally, I’ll continue paying aggressively toward the remaining (unsubsidized) loans.

This seems like the best course of action for now. Unless someone can offer me a better interest rate on a consolidation, that is.

Thoughts?