Reboot Your LifeTampa Student Loan and Bankruptcy Attorney Blog

My sister in law showed me her phone and over just one day she received 5 different messages regarding her student loans.  Two were from Navient and Earnest.  While she didn’t click them to see what they were, I’m certain they were solicitations to refinance her federal loans to a private loan.

Be wary of those.  When interest rates were low, and forgiveness opportunities were also low, refinance made sense for our high wage earners.  Less interest, lower payment, loan repaid much faster.

Now however, forgiveness options are all over the place and many are working.  It’s a bit of a mess, but steering through the debris can result in student loan forgiveness.  But only for federal loans.  If you refinance your loans now, you’ll likely have higher interest, no income driven plans, no or limited forbearance, little protections for disability and certainly no forgiveness.

Parent Plus Borrowers:  There is a pending bill called The Parent Plus Parity Act.  If this bill becomes law it will:

• Make Parent PLUS borrowers eligible for all income-driven repayment plans—including SAVE
• Allow loan forgiveness if the child becomes eligible for Total and Permanent Disability discharge

Great news on the IDR Recount/Audit.   The student loan ombudsman Bonnie Latreille said the Department of Education are almost done processing the One-Time Account Adjustment and that should be done very soon.  She also said that borrowers who have multiple consolidations might see a delay—just because it’s trickier to calculate these more complex accounts. Stay tuned.

This IDR recount is very important for many because under this program you can obtain long lost credit for periods of repayment, forbearance and deferment prior to your Direct Consolidation loans – that was formerly just gone.

Also, if you utilize Fresh Start before midnight 9/30 for any defaulted loans, you can also receive IDR credit for the Covid period – back to March 2020.  That’s another 4.5 years.

NEW – If you cannot get through to Default Resolution Group or FFEL Guarantor so client can enroll  in Fresh Start by midnight Eastern on 9/30,   THERE IS A NEW WAY TO ENROLL BY EMAIL!

ON https://myeddebt.ed.gov/borrower/ SKIP WHITE BUTTONS, and READ LIGHT BLUE BANNER ACROSS TOP OF PAGE.  CLICK ON THE SMALL click here  “to submit an email requesting enrollment into the Fresh Start program, select “Other” in the Inquiry Subject Area dropdown and type “I would like to enroll into Fresh Start” in the Question/Inquiry field.”

Take a screenshot, or a phone pic of the screen when you submit.  Just in case…

Servicers (mostly Mohela at this time) are saying that borrowers should submit their recertification paperwork on time (You can upload it and/or mail it in), but it will not be processed until the injunction is lifted.

If you don’t recertify on time, you will get booted to the standard repayment plan, but you can’t recertify on time because they are not processing the paperwork! UGH!

Here is how to avoid that.