To get all the important details you need on how do i qualify for student loans, how do i see my student loans, how do parent student loans work, How Do I Know If My Student Loans Were Discharged and lots more All you have to do is to please keep on reading this post from college learners. Always ensure you come back for all the latest information that you need with zero stress.
If you’re wondering how to know if your student loans have been discharged, the answer is pretty simple: you don’t. Or at least, it’s not as simple as it sounds.
There are actually two different types of student loan discharge: rehabilitation and forgiveness. Rehabilitation is when you agree to make regular payments for a certain period of time (usually 10 years) and then the remaining balance on your loan is forgiven. Forgiveness is when the government agrees that you’ve made enough payments to offset all or most of your loan balance, so they’ll forgive the rest of your debt.
Neither one of these options is a sure thing. You might be able to get relief from your debt through rehabilitation, but if you miss one payment or go over budget with rehabilitating your loans, it can all fall apart and you’ll be right back where you started—with an enormous amount of debt hanging over your head. The same goes for forgiveness—if your income drops below a certain level or if there are other circumstances that make it impossible for you to pay off your loans as originally planned, then you might have to start from scratch again with rehabilitating them instead.”
Scholarshub Contents Table
How do I apply to have my federal student loan discharged?
Loan discharge refers to the cancellation of your obligation to repay some or all of the remaining amount owed on your loan. Your loan can be discharged only under specific circumstances, such as school closure, a school’s false certification of your eligibility to receive a loan, a school’s failure to pay a required loan refund, or your death, total and permanent disability, or bankruptcy.
You may be eligible for discharge of your federal student loans based on borrower defense to repayment if you took out the loans to attend a school and the school did something or failed to do something related to your loan or to the educational services that the loan was intended to pay for. The specific requirements to qualify for a borrower defense to repayment discharge vary depending on when you received your loan.
sign the certification statement on the Free Application for Federal Student Aid(FAFSA®) form stating that
you are not in default on a federal student loan,
you do not owe money on a federal student grant, and
you will use federal student aid only for educational purposes; and
show you’re qualified to obtain a college or career school education by
having a high school diploma or a recognized equivalent such as a General Educational Development (GED) certificate;
completing a high school education in a homeschool setting approved under state law (or—if state law does not require a homeschooled student to obtain a completion credential—completing a high school education in a homeschool setting that qualifies as an exemption from compulsory attendance requirements under state law); or
enrolling in an eligible career pathway program and meeting one of the “ability-to-benefit” alternatives described below.
Some federal student aid programs have their own eligibility criteria in addition to the general requirements listed above. Check with your college’s financial aid office if you have questions about a particular program.
Registering for Selective Service
Your registration status with Selective Service no longer affects your eligibility to receive federal student aid. However, you can still register through the FAFSA form. For general information about registering, call Selective Service toll-free at 1-888-655-1825 or visit sss.gov.
Note: If you are a citizen of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau, you are exempt from registering.
If you were enrolled in college or career school prior to July 1, 2012, or if you are currently enrolled in an eligible career pathway program*, you may show you’re qualified to obtain a higher education by
passing an approved ability-to-benefit test* (if you don’t have a diploma or GED, a college can administer a test to determine whether you can benefit from the education offered at that school) or
completing six credit hours or equivalent course work toward a degree or certificate (you may not receive aid while earning the six credit hours).
*For more information about these criteria, talk to the financial aid office at your school. Your financial aid counselor can tell you whether your school offers an eligible career pathway program and can advise you about any ability-to-benefit tests the school uses.
how do i see my student loans
An important factor in keeping up with your student loan payments is knowing where to find all of your student loan information. StudentAid.gov is the U.S. Department of Education’s comprehensive database for all federal student aid information. This is one-stop-shopping for all of your federal student loan information.
At StudentAid.gov, you can find:
Your student loan amounts and balances
Your loan servicer(s) and their contact information
Your interest rates
Your current loan status (in repayment, in default, etc.)
how do parent student loans work
How Do Parent Student Loans Work?
The rising cost of a higher education and growing concern over student loan debt have prompted many parents to explore the possibility of taking out loans to help their children pay for college. Their two main options are parent PLUS loans issued by the federal government and private student loans issued by banks and credit unions. Here’s an overview of how parent student loans work and the pros and cons of each.
How Does a Parent PLUS Loan Work?
A direct PLUS loan is an education loan provided through the U.S. government and designed to supplement other forms of college financial aid. Direct PLUS loans are available to graduate students and to the parents of undergraduate students; a direct PLUS loan issued to parents is known as a parent PLUS loan. Qualifying parents can borrow up to the full cost of attending school, including tuition, room, board, books and other expenses, less any financial aid the student gets.
You are eligible to get a parent PLUS loan if your child (or, in certain cases, your stepchild) will be enrolled at least half-time in a college or university, and has applied for and accepted all financial assistance available through the Free Application for Federal Student Aid (FAFSA) form.
Parent PLUS loans are fixed-rate loans with relatively high interest rates. Each year on July 1, the government publishes the direct PLUS loan interest rate that will apply for one year. The current rate of 7.6% for 2018-2019 increased from the 2017-2018 rate of 7%.
One reason for the relatively high interest rates on parent PLUS loans is their relatively lax credit requirements. There is no minimum credit score needed to get a parent PLUS loan; you need only show that you do not have an “adverse credit history.” Your credit history is considered adverse if your credit report shows any of the following:
Accounts with a total outstanding balance greater than $2,085 that are 90 or more days delinquent as of the date of the credit report, or that have been placed in collections or charged off in the two years preceding the date of the credit report.
A determination of loan default, discharge of a bankruptcy, repossession of a car or other assets for nonpayment, or property foreclosure in the five years preceding the date of the credit report.
Any charge-off or write-off of federal student aid debt in the five years preceding the date of the credit report.
Garnishment of your wages to satisfy an unpaid debt during the five years preceding the date of the credit report.
Even if you have adverse credit, you may be able to get a parent PLUS loan by completing an online credit counseling program and doing one of the following:
Getting someone without adverse credit (other than the student whose education is being financed) to endorse the loan by agreeing to pay it if you fail to.
Either way, and with a parent PLUS or private student loan, it’s a good idea to know where your credit stands. Get a copy of your credit reports and scores before you start the process.
Parent PLUS Loan Payment Options
The standard repayment term on a parent PLUS loan is 10 years of fixed payments. Parents may also request a 10-year graduated repayment schedule, which starts with smaller monthly payments and increases the payment amount every two years until the loan is paid off. Parents who borrow $30,000 or more in PLUS loans can opt for an extended 30-year repayment schedule.
You have the option to begin making payments on a PLUS loan as soon as the funds are issued or waiting for up to three years after the student’s graduation to begin paying back the loan. Interest accrues on the loan starting on the day the funds are issued, however, so deferring the start of payments, using graduated payments and extending the repayment period all increase the overall cost of the loan.
In addition to the interest charges associated with your loan, parent PLUS loans carry an origination fee, calculated as a percentage of the total loan amount. The current fee percentage is just under 4.25%. This sum is commonly rolled into the monthly loan payment schedule. Using the fee and interest rates currently in effect, that means you’ll be charged 7.6% interest on 104.25% of the amount you borrow, starting the day the loan is issued.
A more affordable alternative to parent PLUS loans, especially for parents with good to excellent credit, are private student loans. These are a form of standard installment loan, similar to a car loan or mortgage, offered by banks, credit unions and some specialty lenders focused on education loans.
Because private student loans are issued by competing lenders, they are available with a wide variety of interest rates and fees. As with the mortgage market, some student loans carry fixed interest rates, while others use adjustable rates that change over time in sync with market indexes. As with a car loan or mortgage, lenders will review your credit, including a credit report and one or more credit scores before making a loan offer. Applicants with better credit will likely be offered better lending terms in the form of lower interest rates and fees than applicants with poorer credit.
As is always true when applying for a consumer loan of any kind, shop around for the best lending terms you can get. You can apply to multiple private student loan providers at the same time, and if it’s done within a short period of time, your credit won’t take a hit for each individual inquiry the lenders make.
Private student loans offer parents greater flexibility than parent PLUS loans in terms of sharing responsibility for paying the loan. Private student loan lenders typically give parents the option of assuming full responsibility for a loan or sharing responsibility with the student whose education is being financed by cosigning a loan.
With a cosigned loan, the student is considered the principal borrower, and the parents agree to pay off the loan if the student fails to do so. When applying for a cosigned loan, credit histories of the parent(s) and the student are considered in the application process.
How Do Parent Student Loans Impact Credit?
Parent student loans, whether issued by the federal government or a private lender, are significant debts, and mismanaging them can have serious credit consequences. Missed payments can quickly lower credit scores and defaulting can put severe black marks on credit reports that will discourage lenders from doing business with the parent and student for years to come—or charging high interest and fees and interest payments on any credit they are willing to extend.
One critical distinction of a cosigned private student loan is that failure to keep up with payments will damage the credit of parents and student alike, while with parent PLUS loans and private student loans issued to parents alone, only the parents’ credit is at risk.
Considerations Beyond Credit
The rising cost of a college education means that a loan to pay for a four-year course of study (along with any graduate studies) can easily be comparable to a mortgage loan in terms of size, monthly payment and, potentially, the time required to pay it off. Before taking on a student loan to support a child, parents would be wise to consider the long-term effects that making loan payments—and not saving the money they’re using for those payments— will have on their retirement plans.
If student loan payments prevent fully investing in 401(k) funds and other retirement vehicles, they could have negative long-term impact on family finances. If that’s a concern, it’d be wise to consult with a financial expert to help determine the wisdom of taking out a parent student loan.
As long as it doesn’t imperil your retirement or financial future, taking out a loan to help pay for your children’s college education can be a great investment in their future, A parent PLUS loan is an accessible option for parents with marginal credit (but no major negative credit events in the past five years), but if you qualify for a private student loan, that’ll likely be more affordable over the life of the loan.