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Nelnet loans 7.50% interest can I get anything better?

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Contributor

Nelnet loans 7.50% interest can I get anything better?

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.

Message 1 of 19
18 REPLIES 18
Established Member

Re: Nelnet loans 7.50% interest can I get anything better?

Do you mind if I ask why you aren't considering loan forgiveness?

 

 

 

Message 2 of 19
Contributor

Re: Nelnet loans 7.50% interest can I get anything better?


@AugustRush1993 wrote:

Do you mind if I ask why you aren't considering loan forgiveness?

 

 

  •  

Multiple reasons but since you asked:

  • Our combined monthly 15% of income for 10 years is very close to our current loan amount.
  • 99% of applications for public loan forgivness were rejected for various reasons.
  • People love to hate doctors, we will be the first ones to loose loan forgiveness when laws change. If that happened then 10 years from now we would owe 2,000,000 instead of 1 million and our yearly interest would be higher than what we could afford to pay. 
  • We can pay off this loan in 5 years

 

Message 3 of 19
Established Member

Re: Nelnet loans 7.50% interest can I get anything better?

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. 

 

 

Message 4 of 19
Contributor

Re: Nelnet loans 7.50% interest can I get anything better?


@AugustRush1993 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.

Message 5 of 19
Established Member

Re: Nelnet loans 7.50% interest can I get anything better?


@Green456 wrote:

@AugustRush1993 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 Smiley Happy

Message 6 of 19
Frequent Contributor

Re: Nelnet loans 7.50% interest can I get anything better?


@AugustRush1993 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.

Current Cards:

Goal Cards:

EX 8: Jan 2018 - 546 | EQ 8: Jan 2018 - 571 | TU 8: Jan 2018 - 566
EX 8: Feb 2019 - 579 | EQ 8: Feb 2019 - 595 | TU 8: Feb 2019 - 595
TCL: $1,500 | AAoA: 8.3 yrs | Util: 64% (high due to charge-offs - I'm working on 'em!)
Cleaning up and rebuilding after a long hiatus from credit
Message 7 of 19
Contributor

Re: Nelnet loans 7.50% interest can I get anything better?


@AugustRush1993 wrote:

@Green456 wrote:

@AugustRush1993 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 Smiley Happy


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.

Message 8 of 19
Established Member

Re: Nelnet loans 7.50% interest can I get anything better?


@beutiful5678 wrote:

@AugustRush1993 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. Smiley Happy 

 

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)

Message 9 of 19
Contributor

Re: Nelnet loans 7.50% interest can I get anything better?


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.

Message 10 of 19