21 Loans and questions

[Itgem679]

Hi! I have 21 loans with Navient from American InterContinental University. Balances ranging from $285 to $25,354. My bottom three, for example, are $285, $419, and $899. Interest ranges between 5-7%, depending on which loan. The total owed $127,371.

If I applied money to them, is it better to make payments to 5 of the loans with equal amounts or to pay off the $285 in full, then pay off the $419 in full, so on and so forth? I would imagine I should want to eliminate the interest for each loan by paying off each loan in full, if possible, right?

There is an article about AIU eliminating my loans but I don't know much about it. I don't use 2 of my degrees at all.

Any help will motivate me to stop ignoring these loans and start doing something about them.

[Anonymous]

Are they private or federal? What is their current status (late, in collections/ defaulted, etc)?

[Shooting-For-800]

Three ways to look at it...

Pay towards highest interest rates first since this will save you money.

Pay towards lowest balance first as this will motivate you since loans are getting paid off.

Combo of both.

[Anonymous]

To be clear, the methods of paying off the lowest balance should mean making at least the minimum payments on all your loans and the extra go to either the one with the highest interest rates or the lowest balance. If you only pay on one, you risk having legal/ financial consequences on the others.

The strategy also depends on the type of loans. If they are federal student loans you have quite a few different options. Given the balance of your loans and your income, you might be better off on an Income-driven repayment plan leading to forgiveness. Federal loans also have a different timetable as they don't need to sue you to start taking your tax refund or garnish your wages. Once they garnish your wages many of the options to get out of default will also disappear.

Here is an article that talks about student loan and repayment:
https://www.cnbc.com/amp/2019/10/29/this-financial-mistake-takes-americans-nearly-20-years-to-recove...

[Itgem679]

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@Anonymous wrote:
Are they private or federal? What is their current status (late, in collections/ defaulted, etc)?

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They are Navient, so Federal. They are all in good standing. I am in an IBR and am not sure if I should start paying them off while in IBR or let them cancel, as my school was a part of Career Education Corp. 

[Anonymous]

Cancellation for sure!! If never heard of those schools so I looked it up. This article says you should have gotten a letter of you were getting forgiven:
https://www.insidehighered.com/quicktakes/2019/01/04/career-education-corp-settles-states-forgives-s...

https://studentloansresolved.com/2019/02/26/apply-american-intercontinental-loan-discharge/

Even if you're not, I will apply for the Borrower Defense forgiveness. The forgiven amount might be taxable, but so far they seem to be ruling school-by-school that it's not. Plus there is also the possibility of insolvency, in which case you wouldn't owe anything. https://thecollegeinvestor.com/22725/student-loan-debt-forgiveness-insolvency/

I would continue paying as little as possible on those loans with an IDR plan such as IBR (or REPAYE) until you can get it sorted out. Not unless you want the hassle of them going into collections if this drags on, even if they'll get discharged in the end. It's up to you.

I'm glad you have a resolution and hopefully a fresh start.
Good luck!

[Itgem679]

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@Anonymous wrote:
Cancellation for sure!! If never heard of those schools so I looked it up. This article says you should have gotten a letter of you were getting forgiven:
https://www.insidehighered.com/quicktakes/2019/01/04/career-education-corp-settles-states-forgives-student-debt

https://studentloansresolved.com/2019/02/26/apply-american-intercontinental-loan-discharge/

Even if you're not, I will apply for the Borrower Defense forgiveness. The forgiven amount might be taxable, but so far they seem to be ruling school-by-school that it's not. Plus there is also the possibility of insolvency, in which case you wouldn't owe anything. https://thecollegeinvestor.com/22725/student-loan-debt-forgiveness-insolvency/

I would continue paying as little as possible on those loans with an IDR plan such as IBR (or REPAYE) until you can get it sorted out. Not unless you want the hassle of them going into collections if this drags on, even if they'll get discharged in the end. It's up to you.

I'm glad you have a resolution and hopefully a fresh start.
Good luck!

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Thank you for the links to the articles. I never knew they existed - I came across a Forbes article about AIU and that's when I realized I wasn't alone. I graduated with 3 degrees from AIU, they lied throughout my time with them and they were really good at convincing prospective students to enroll. I was drawn in 3 times and when I realized the debt I was being crushed under, I just did my best to find work and see if I could begin paying them off. I make $55K a year and cannot afford to take care of my home and child with a $1300 a month payment to Navient. I felt like there was no end in sight...now, finally, I feel hopeful...

[Anonymous]

$1300?!? That sounds like the standard repayment plan. Idk why they do that Automatically. They don't tell people about IDR or discharge even if they qualify. 😡 Sometimes I think the majority of higher education is a scam because it seems to be designed that those who take out the most in loans out of actual need get the least benefit after graduation due to the looming debt. A parent should not have to choose between day care and school loan payments.

No, you will not have to pay that much unless you had been making a whole lot of money. There is a calculator to determine about how much your payments will be. But also, I think you qualify for the discharge. The Dept of Education just started to process this again. I would apply as soon as possible.

Sign in for it to fill in your loans Automatically. Repayment Estimator:
https://studentloans.gov/myDirectLoan/repaymentEstimator.action