Hello, I am looking into the Student Loan rehab programs. I have Nelnet as my provider. I have two main questions--
1. Has Trump's Cancellation of Obama's SL Protection Plan nullified the possibility of rehabbing my loans? I don't see any information about it on their website. As per this article that is the case: Trump & Student Loans. Has this already taken effect?
2. If I were able to rehabilitate my federal loans, would the fed still own them? I don't want to do the rehab if my federal privileges would be lost. I am a public service employee and I'm eligible to have my loans forgiven after ten years (unless Trump ruins that too), so I don't want to lose that privilege by rehabbing.
Any info or thoughts would be greatly appreciated!! Thanks!
1. The rollback of the Obama era student loan protections do not really change the rehab process. What they do change is the amount of money that the collection agencies can charge. For example the 2015 Student Loan protections limited the fees collection agencies and loan servicers could apply to loans in defailt. Now they are allowed to charge up to 16%. I rehabbed my loans prior to the 2015 executive order and the collection costs were unfortunately added into my balance. As to when this goes into effect, I believe it takes place immediately. So yes - you can rehab your loans exactly as before, it's just going to be more expensive.
2. A rehabbed federal loan is still federal and you will enjoy the public service employee forgiveness after 10 years (assuming this doesn't get rolled back). The only way to lose your federal loan status would be to refinance your federal loans with a private lender.
Do we know who this effects? For example I started my rehab process back in October and will be making my 8th and 9th (making it early) payment next month. Will I be charged the larger fees? I was told when I started that if I successfully completed the rehab program the collection fees would go away. I thought I also read that they could raise the interest rate on those coming out of rehab, but I may have read that wrong because I remember the number 16%.
I've been trying to find the answers to these questions, but no one seems to know!