We help people who need student loan help or bankruptcy in Colorado. Since 2006 we have helped thousands of people better understand and solve their federal and private student loan problems.
Services Related to Federal Student Loans
Federal student loan issues can be straightforward or very complicated. There are lots of loans, repayment plans, and options, but not much flexibility. And now the Biden Administration is making many changes.
My goal is to educate you, and not only resolve your immediate problems but also show you how to manage these loans over many years and use free federal tools when possible.
Ignoring federal student loans can be costly. Your starting balance is one amount, but add on interest, capitalized interest, late fees and collection costs allowed by law, and these loans can balloon to very high balances.
FAFSA®: Free Application for Federal Student Aid
Expected Family Contribution (EFC) is an index number used to determine your eligibility for federal student financial aid.
Of the 20+ types of Federal loans, the main ones are:
DIRECT
DIRECT Consolidated
FFEL owned by the Department; &
FFEL Consolidated owned by the Department;
FFEL NOT owned by the Department;&
FFEL Consolidated NOT owned by the Department;
PERKINS [no new after 9/30/2017].
DIRECT GRADUATE PLUS [students or parents]
PARENT PLUS
SUBSIDIZED or UNSUBSIDIZED:
Federal student loan where a borrower isn’t generally responsible for paying interest while in an in-school, grace, or deferment period vs a loan which requires borrower to always pay interest regardless of repayment plan or status.
CAPITALIZATION OF INTEREST:
Capitalization is the addition of unpaid accrued interest to the principal balance of a loan. Over time, this can increase your monthly payment.
LOAN STATUS:
GRACE
GOOD STANDING
DELINQUENT [1-270 DAYS LATE]
DEFAULT [270+ DAYS LATE]
LITIGATION [Very rare]
REPAYMENT STATUS:
GRACE
GOOD STANDING
DELINQUENT [1-270 DAYS LATE]
DEFAULT [270+ DAYS LATE]
LITIGATION [Very rare]
REPAYMENT PLANS:
Not all loans are eligiblle for all loan types.
TIME-BASED:
STANDARD
GRADUATED
EXTENDED GRADUATED
INCOME DRIVEN [IDR]:
New SAVE - [5% 0f discretionary income]
ICR [INCOME CONTINGENT] [20% of discretionary income (2 formulas)]
IBR [INCOME-BASED] [15% of discretionary income]
PAYE [PAY AS YOU EARN] [10% of discretionary income]
ICR, IBR, PAYE & REPAYE offer balance forgiveness after 20 or 25 years; certain undergraduate loans after 20 years.
ISP [INCOME SENSITIVE [no balance forgiveness]
ALTERNATIVE [very rare]
When REPORTING INCOME, monthly payments are figured based off of IRS tax form 1040 Adjusted Gross Income [AGI], but other sources like paystubs will be accepted if your income has changed or you did not file taxes.
All repayment plans require you to report your adjusted gross income for you & your spouse EXCEPT for the IBR plan, IF YOU FILE YOUR FEDERAL TAXES AS MARRIED FILING SEPARATLY, you can report only your income to establish your monthly payment.
Federal loans virtually NEVER have CO-SIGNERS. In very rare cases students under 18 may have an Endorser, but if you have a co-signer, 99.9% of the time that is a private loan.
NEW ISSUES OR QUESTIONS:
Go to <Important Updates> for all the NEWEST updates.
I CAN HELP YOU WITH ALL ISSUES RELATED TO FEDERAL STUDENT LOANS SUCH AS:
STANDARD FEDERAL STUDENT LOAN ISSUES:
1. Understand the type(s) of federal loans you have.
See list in left hand column. Many people have more than one type.
2. Federal Repayment Plans -Which Plan is best for you?
See the list in left column.
Time-based Plans — These plans set a time period for you to repay your loan. The normal terms are 120 months for the Standard Plan or 300 months for balances over $30,000.
Income Driven Repayment Plans [IDR plans] - 6 TYPES - EACH WITH DIFFERENT RULES —
NEW “SAVE”, REPAYE, PAYE, IBR, ICR, ISP, Alternative
3. Federal Loan Standard Consolidation & Repayment Program Enrollment - Get 1 loan with 1 Servicer and 1 payment
If you have multiple federal student loans, you can consolidate them into a single Direct Consolidation Loan. This may simplify repayment IF YOU HAVE MULTIPLE SERVICERS . Consolidation can be done for free online at studentaid.gov/app/launchConsolidation.action or by mailing in a paper application. BUT tthere are important rules and choices to be aware of. Please contact me for more information.
NOTE: DURING THE COVID PAYMENT PAUSE, THE DEPARTMENT HAS STOPPED COLLECTION [# 4-8 BELOW] ON DEFAULTED FEDERAL STUDENT LOANS.
4. CURE DEFAULT - Option 1 - Federal Loan Forced Consolidation
5. CURE DEFAULT - Option 2 - Federal Rehabilitation of Defaulted Loans
6. Stop Federal Administrative Wage Garnishment [AWG]
7. Stop Garnishment of Social Security Benefits
8. Stop Department of Education Federal Tax Refund Offset
8. Application for Federal Special Loan Forgiveness
8.1 PSLF LIMITED WAIVER
FOR MORE INFORMATION <CLICK HERE>
8.2 2018 TEPSLF - GOES PAST 10/31/22 UNTIL FUNDS RUN OUT
8.3 ORIGINAL PSLF RULES COME BACK NOV 1, 2022
8.4 Teacher Loan Forgiveness Application (5 Years)
Under the Teacher Loan Forgiveness Program, if you teach full time for five complete and consecutive academic years in a low-income school or educational service agency, and meet other qualifications, you may be eligible for forgiveness of up to $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.
If you have a Direct Consolidation Loan or a FFEL Consolidation Loan, you may be eligible for forgiveness of the outstanding portion of the consolidation loan that repaid an eligible Direct Subsidized Loan, Direct Unsubsidized Loan, Subsidized Federal Stafford Loan, or Unsubsidized Federal Stafford Loan.
fOR FULL DETAILS OF THE TECHNICAL TEACHING AND SCHOOL REQUIREMENTS, SEE https://studentaid.gov/manage-loans/forgiveness-cancellation/teacher
Except under the PSLF lIMITED WAIVER which expires 10/31/22, borrowers may not receive credit toward Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF) for the same period.
8.5 Perkins Forgiveness
Federal Perkins Teacher Loan cancellation is based on eligible employment or eligible volunteer service and the length of time that you were in such a position. Discharge of your Perkins Loan may occur under certain circumstances.
Other Occupations Perkins forgiveness:
In addition to teaching, the following employment or service may qualify you for a full or partial Perkins Loan cancellation depending on the type of loan you have and the date of the loan:
Early childhood education provider
Employee at a child or family services agency
Faculty member at a tribal college or university
Firefighter
Law enforcement officer
Librarian with master’s degree at Title I school
Military service
Nurse or medical technician
Professional provider of early intervention (disability) services
Public defender
Speech pathologist with master’s degree at Title I school
Volunteer service (AmeriCorps VISTA or Peace Corps)
9. Federal Administrative Discharges
9.1 Total and Permanent Disability
I do not charge to help anyone get a TPD Discharge. Please contact me directly.
3 ways to be granted a Department of Education TPD DISCHARGE
Option 1 – TPD Discharges for veterans with a 100% VA Disability Rating
The VA is supposed to notify the Department of all 100% ratings, but if that did not happen you can apply directly to the Department for a TPD Discharge.
Option 2: TPD Discharges for those currently receiving Social Security Disability or Supplemental Security Income (SSI) benefits and the SSA says your medical reviews will be 5 or more years apart.
The SSA is supposed to notify the Department of everyone who qualifies, but if that did not happen you can apply directly to the Department for a TPD Discharge.
OPTION 3 – TPD Discharge by acertain medical providers’ Certification - Dr. PA, NP, certified psychologist - only has to fill out 1 page on the TPD Application. Nelnet processes Applications for the Department.
Anyone may submit a TPD Application (with a certification from a doctor of medicine (M.D.) or osteopathy (D.O.) who is licensed to practice in the United States) that a borrower is totally and permanently disabled. The physician must certify that the Applicant is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that:
• Can be expected to result in death;
• Has lasted for a continuous period of not less than 60 months; or
• Can be expected to last for a continuous period of not less than 60 months.
“Substantial gainful activity” is a level of work performed for pay or profit that involves doing significant physical and/or mental activities. In Option 3, a disability determination is totally based on the physician’s assessment and completion of the Application. So an Applicant is most likely not employed or self-employed at the time of Application, but the rules do not say a person may not be slightly employed or self-employed. All that is required is that the Applicant’s Dr. certify on the Application that they cannot perform “Substantial gainful activity.” Nelnet may receive an Application and contact the Dr. for more information, but in my experience, this is very rare.
If the Nelnet approves a Discharge Application based on a Physician’s Certification, Nelnet will notify the Applicant and the holders of their federal loans of the approval. After being notified that the Department has approved a discharge request, the person’s federal loan holders will transfer their loans to Nelnet to discharge their loans. Usually takes about 60 days.
People who are granted a TPD Discharge based on a Physician’s Certification used to be subject to an income monitoring process for 3 years, but since COVID, THE DEPARTMENT HAS DECIDED TO DROP THAT REQUIREMENT FOR GOOD.
Once a Discharge is granted, NO PAYMENTS ARE REQUIRED, and after 3 years PASSES, the TPD Discharge is permanent. Once the rule is changed permanently, the 3 year time will be shortened
I have a sample letter I can customize for your Dr. that you can give him or her when you ask the Dr. to sign the form.
9.2 False Certification (ID Theft/Forgery/Unauthorized Signature)
9.2.1 Forgery
If you believe you were the victim of forgery, you might be eligible for a discharge of your federal student loan(s). This form may be used by borrowers with loans held by the U.S. Department of Education.
9.2.2 Ability to Benefit
If you didn't have a high school diploma or GED when you enrolled and don't think the school properly assessed or certified your ability to benefit from the education you paid for with this loan. This form may also be used by parent PLUS borrowers.
9.2.3 Disqualifying status
When the school certified your eligibility, but because of a physical or mental condition, age, criminal record, or other reason you are disqualified from employment in the occupation in which you were being trained. This form may also be used by parent PLUS borrowers.
9.2.4 Unauthorized Signature by someone at school
The school signed your name on the application or promissory note without your authorization or the school endorsed your loan check or signed your authorization for electronic funds transfer without your knowledge. NOT if the proceeds of the loan were delivered to you or applied to charges owed by you to the school. This form may also be used by parent PLUS borrowers
9.3 School Closure (enrolled within 120 days of closure)
When your school closes while you're enrolled and you do not complete your program because of the closure or when your school closes within 120 days after you withdraw.
9.4 Unpaid Refund
When you believe you don't owe the full loan amount because the school should have returned some of the money it received. This form may also be used by parent PLUS borrowers.
9.5 Death
If you die, then your federal student loans will be discharged after the required proof of death is submitted. Your parent's PLUS loan will be discharged if your parent dies or if the student on whose behalf your parent obtained the loan die..
10 Borrower Defense to Repayment/SWEET v CARDONA
SEE https://www.ppsl.org/cases/sweet-v-cardona
11. Federal Litigation - [very rare]
11.1 Federal Loan Declaratory Judgment
11.2 Federal Collection Lawsuit
12. Bankruptcy Adversary Proceeding 11 USC 523(a)(8)
Department announced a new policy as to how it will handle Bankruptcy Adversaries. Stay tuned for more details.
The “Brunner test” requires a showing that 1) the debtor cannot maintain, based on current income and expenses, a “minimal” standard of living for the debtor and the debtor’s dependents if forced to repay the student loans; 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period of the student loans; and 3) the debtor has made good faith efforts to repay the loans. (Brunner v. New York State Higher Educ. Servs. Corp., 831 F. 2d 395 (2d Cir. 1987).
13. Federal Forbearances
“A period during which your monthly loan payments are temporarily suspended or reduced. Your lender may grant you a forbearance if you are willing but unable to make loan payments due to certain types of financial hardships. During forbearance, principal payments are postponed but interest continues to accrue. Unpaid interest that accrues during the forbearance will be added to the principal balance (capitalized) of your loan(s), increasing the total amount you owe.” studentaid.gov
General Forbearance (Request your loan servicer to grant forbearance when you can't make payments due to financial hardship, illness, or other reasons.)
Medical or Dental Internship/Residency, National Guard, and DoD Student Loan Repayment (You do not qualify for this forbearance if you qualify for a deferment for a medical or dental internship/residency or for military service)
Student Loan Debt Burden Forbearance (If the total amount you owe each month for all the student loans you received is 20 percent or more of your total monthly gross income (additional conditions apply).)
Teacher Forbearance (If you are performing teaching services that would qualify for Teacher Loan Forgiveness.)
14. Federal Deferments
“A temporary postponement of payment on a loan that is allowed under certain conditions and during which interest generally does not accrue on Direct Subsidized Loans, the subsidized portion of Direct Consolidation Loans, Subsidized Federal Stafford Loans, the subsidized portion of FFEL Consolidation Loans, and Federal Perkins Loans. All other federal student loans that are deferred will continue to accrue interest. Any unpaid interest that accrued during the deferment period may be added to the principal balance (capitalized) of the loan(s).” studentaid.gov
Unemployment Deferment (or inability to find full-time employment; maximum eligibility is 36 months.)
Economic Hardship Deferment (includes Peace Corps service) [up to 36 months maximum]
Graduate Fellowship Deferment (in a full-time course of study)
Military Service and Post-Active Duty Student Deferment (during active duty and, in some cases of at-least half-time enrollment, 13 additional months)
In-School Deferment (enrolled at least half-time)
Parent PLUS Borrower Deferment (6 months following the date that the student on whose behalf you borrowed ceases to be enrolled at least half time)
Cancer Treatment Deferment [up to one year with renewal possible]
Rehabilitation Training Deferment (full-time rehabilitation program for individuals with disabilities)
Temporary Total Disability Deferment [Maximum eligibility for this deferment is 36 months. To qualify, you must have an outstanding balance on a FFEL Program loan that was first disbursed before July 1, 1993 or had a balance on a FFEL Program loan first disbursed before July 1, 1993 when you obtained a loan on or after July 1, 1993]
15. Special Veteran’s Programs
SERVICEMEMBERS CIVIL RELIEF ACT (SCRA): INTEREST RATE LIMITATION REQUEST
Service members eligible for this benefit can have their interest rate on eligible loans capped at 6% during qualifying military service. Your loan holder will check the U.S. Department of Defense's Defense Manpower Data Center (DMDC) on a regular basis and automatically apply the SCRA interest rate limitation. Use this form if the military active duty periods are different or the benefit is not applied to your loans.
If you have a special Veteran’s program needs, please contact me.
Most descriptions and all forms on this page come from studentaid.gov or studentaid.gov/repayment-forms/library