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My wife and I we are both looking next year to consolidate our loans. We have currently 950,000 but next year that number will be 1,000,000. We decided to go against loan forgiveness for numerous reasons. Will any banks refinance such high student loans? I would love to get less than 5% interest. And again we don't want to touch loan forgivness with a 10 foot pole.
Do you mind if I ask why you aren't considering loan forgiveness?
@Anonymous wrote:Do you mind if I ask why you aren't considering loan forgiveness?
Multiple reasons but since you asked:
That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
@Anonymous wrote:That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
Yes I agree. Federal loans are best to start with due to multiple options you get with them. You can sign up for the loan forgiveness, defferment, sometimes government subsidizes your interest, etc. But after graduating when we are at a point where 7.5% and 6.5% means $30,000 difference then staying with federal makes less sense financially.
@Green456 wrote:
@Anonymous wrote:That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
Yes I agree. Federal loans are best to start with due to multiple options you get with them. You can sign up for the loan forgiveness, defferment, sometimes government subsidizes your interest, etc. But after graduating when we are at a point where 7.5% and 6.5% means $30,000 difference then staying with federal makes less sense financially.
True, it really depends on how much loan debt somebody has. I was unemployed earlier this year and the temporary deferment really helped.
I seriously thought about refinancing my student loans with my credit union, but decided not to. If something happened to me, all that loan money would no longer qualify for the "death benefit" and my family would be stuck with the bill. We don't usually think about this stuff, but I think it's important. Lastly, refinancing would no longer allow me to pay down each loan individually (paying the highest interest first, etc.).
Just my thoughts
@Anonymous wrote:That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
Off topic, but for loans forgiven through PSLF are not considered taxable income:
Federal Student Aid says:
Note that loan amounts forgiven under the PSLF Program are not considered income by the Internal Revenue Service. Therefore, you will not have to pay federal income tax on the amount of your Direct Loans that is forgiven after you have made the 120 qualifying payments.
As a financial aid professional, I'd hate for you to be giving out misinformation.
Loans forgiven at 20 or 25 years (not through PSLF) are taxable.
@Anonymous wrote:
@Green456 wrote:
@Anonymous wrote:That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
Yes I agree. Federal loans are best to start with due to multiple options you get with them. You can sign up for the loan forgiveness, defferment, sometimes government subsidizes your interest, etc. But after graduating when we are at a point where 7.5% and 6.5% means $30,000 difference then staying with federal makes less sense financially.
True, it really depends on how much loan debt somebody has. I was unemployed earlier this year and the temporary deferment really helped.
I seriously thought about refinancing my student loans with my credit union, but decided not to. If something happened to me, all that loan money would no longer qualify for the "death benefit" and my family would be stuck with the bill. We don't usually think about this stuff, but I think it's important. Lastly, refinancing would no longer allow me to pay down each loan individually (paying the highest interest first, etc.).
Just my thoughts
Good point. Thats why i got life insurance. I got enough to pay off mine and my wife loans, pay off our house and still have money left over to pay off kid's colleges. Its a term life insurance so its not expensive.
@beutiful5678 wrote:
@Anonymous wrote:That makes sense, I was just curious. I work in financial aid and have PSLF-eligible loans myself. Most people don't realize how loan forgiveness works. Also, the fact that Federal Student Loans/Direct Loans are just about the best student loans available (when compared to private loans such as Sallie Mae, Wells Fargo). That's my opinion, from my few years of experience.
If you can pay off the loan in 5 years, PSLF doesn't make any sense in your case. In addition, you would have to pay taxes on the "forgiven" portion of the loan.
Off topic, but for loans forgiven through PSLF are not considered taxable income:
Federal Student Aid says:
Note that loan amounts forgiven under the PSLF Program are not considered income by the Internal Revenue Service. Therefore, you will not have to pay federal income tax on the amount of your Direct Loans that is forgiven after you have made the 120 qualifying payments.As a financial aid professional, I'd hate for you to be giving out misinformation.
Loans forgiven at 20 or 25 years (not through PSLF) are taxable.
You are correct, I researched it again and saw that PSLF forgiven loan amounts are not treated as taxable income. I am definetly not a tax expert, but as a financial aid professional I don't advise students about public service loan forgiveness. I focus on my speciality and matters related to our college- loan servicers are best equippped to deal with these questions.
Personally, I wouldn't be suprised if PSLF is done away with in the next few years. (Meaning that people currently signed up would still be eligible, but no new borrowers would be considered)
Personally, I wouldn't be suprised if PSLF is done away with in the next few years. (Meaning that people currently signed up would still be eligible, but no new borrowers would be considered)
That's what we are worried about too. 2 million to be forgiven is a lot of money. And even though we are both eligible and probably would be grandfathered I wouldn't be suprised if a cap would be placed.