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Advice Team Responses
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Student Loans: General |
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More Advice Team |
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A friend of mine, who works on a Native American reservation, mentioned that the government will forgive my student loans if I can find work on a reservation, is this true? If not, are there other ways to get assistance in paying these loans off? Thanks for your help. -Vanessa |
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Vanessa,
Since I have never heard of such a practice, I made a quick call to the Department of Education. There are a few reasons that a loan can be discharged (the school closed, someone forged your signature, etc.), but yours does not seem to be one. They suggested that you contact your lender or your school's financial aid office for additional information. If you are struggling with debt, including student loans, you might benefit from visiting with a MMI counselor.
Susan |
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I am considering consolidating my undergraduate Stafford Loan with my wife's (we are almost six years out of college). For me, it's not about reducing the payment, I plan to make the same payments we make now, but I would like to reduce the number of bills I have to pay and, more importantly, lock in a interest rate. I'm wondering if you could comment on the impact that this sort of consolidation has on our credit rating. We currently have excellent credit, but are looking to buy a house in the near future and don't want to damage our rating. -Frank |
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Frank,
You are correct, today's rates are relatively low and it may be wise to take advantage. Please note that there are a few disadvantages to consolidating your loans into one. First of all, if one of your spouse were to pass away or become disabled (or if the marriage ended in divorce), you would be responsible for the entire loan amount. In addition, if one spouse would need a deferment, you would both have to qualify.That being said, the exact impact it will have on your credit is difficult to determine. Of course, the inquiry will appear and too many can send a "red flag" to potential creditors. Another possible cause of any impact may be that it will appear on your individual report that you have increased the debt amount (by adding your wife's debt to yours). For more information about loan consolidation, visit www.salliemae.com
Good luck with your decision,
Susan |
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I had a $1,000 student loan in the 70s, when I was married. My ex-husband was supposed to pay it and never did. More than 25 years later, the IRS took my tax return. Am I liable for that loan? -Cathy |
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Cathy,
Twenty-five years may seem like a long time for the government to chase $1,000, but the government doesn’t give up easily. In fact, most student loans even survive a bankruptcy. Regardless of what your ex-husband was supposed to do, the debt is ultimately your responsibility. If your tax returns were enough to pay your loan in full, then the issue should be resolved. If not, I recommend that you find a way to pay the balance.
Susan |
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I have some disparaging marks on credit report. Most are student loans, but I don't know who is handling them and I want to get them paid. Can you help me? Marvin |
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Marvin,
A quick call to the Department of Education should provide the answers you seek. Reach them at 800-4-FEDAID.
Susan |
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My wife and I have combined our student loans. Our current balance is $45,000. I was curious to know if there are any grants that will pay off some or all of your student loan. We can't afford the $380/month payment and if we don't pay they get keep adding interest.
-Eddie |
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Eddie,
Unfortunately, I do not know of any grants to help pay off your student loans. You can try contacting your lender directly to explain your situation. They may have programs to help. For example, you may be able to defer your loan payments, but be careful that you aren’t just putting off the real issue. My recommendation is to make every possible effort to repay your debts. Government loans are not likely to go away. In fact, I know of someone who had her tax return taken by the government to pay a student loan that was more than 25 years old! You may benefit from MMI’s private, self-paced courses on money management. Find them in the “education” section of the www.moneymanagement.org website.
Good Luck,
Susan |
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What can you do about college loans? Can they be consolidated? -Tonia C |
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Tonia,
If you are interested in consolidating your federal student loans, please call 800-557-7394 for a complete listing of loans eligible for consolidation and repayment options. You can also check out your consolidation options on the government’s website at: www.ed.gov/DirectLoan/consolid.html. Other options might be the Student Loan Marketing Association, known as Sallie Mae at (800) 524-9100 or (Sallie Mae) and USA Group (www.usagroup.com).
Susan |
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