Good morning guys.
I am so confused about all this stuff. My student loans are all from 2/2000 & 7/2001, I have a total of 5 loans in default totaling $23,570 ($19,811 in principal and $3,759 in interest). The servicer currently is Default management and collections systems. There are both subsidized (2) and unsubsidized (3) loans. They are all FFLEP loan types. I also received PELL grants during this time as well, of course those are not in need of repayment.
The loan status of the 5 are all default. Years ago I remember entering into a repayment plan but we all know those next dumb steps by me. I did not pay these when in IDR and now all status' reflect default with effective date of 12/08/2015. I should also state that these student loans have all been far removed from my credit report.
Being out of sight out of mind, I was only reminded of these defaulted student loans early last summer (June 2021) when I applied for a FHA loan and they informed me that I was on the CAVIRS list. I am not denying these are in all 5 of my loans. I also had 4 loans which I did pay off properly. I have so many questions and my head is shaking with all the information that has been announced w/ Biden's fresh start program as well as just in general.
My tri-merge mortgage score is currently 684 so at this point I can qualify (I pre-qualified last summer for a conventional mortgage but due to the market did not find a home) for conventional route again but I am wondering the impact of my loans being wiped out and the effect on being able to apply for FHA as well. I should also mention that w/ yesterdays announcement of up to $20K being wiped out, that would all but take care of the dust for me. I make under the threshold of 125K and I am a single mom of 3. I also work at a hospital and if I hadn't been so dumb, I probably could have had this forgiven if I had done something about this at the start of the pandemic when they paused all payments etc.
Alas, I know there is quite a bit of text here but again, I don't understand most of fine print. I am in the bracket of being able to recieve up to $20K wiped due to being under the income requirement as well as receiving PELL grants. So if I do end up getting $20K applied, does that mean the balance of $19,811 will be forgiven completely? What about the interest so far? Am I still required to pay the $3,759 interest so far even if the principal loan balance is cleared? I have also been trying to search if I would qualify with loans for at least 20 or 25 years, does that also mean this student loan would be forgiven as well due to these dating back over 20 years?
Sorry for such a long post, this all is really hard at times to follow and trying to break down the ifs and whats is just overwhelming.
TLDR:
will my student loan balance above be forgiven after Biden's announcement yesterday and how will that effect me applying for mortgages in the future?
TY as always! Have a great Thursday guys.
Starting Score: 461
@pizzadude wrote:Hi @IamWesty12 - I've broken your post out into it's own seperate thread and also edited to make more readable.
I think the short answer, at least based on what we know so far from yesterday's announcement, is that you likely qualify to have your loans forgiven. In terms of principal / interest specifics, I think we'll have to await details on how this will be rolled out to know for sure.
@pizzadude honestly, if possible I would jump through my laptop and kiss you for your early synopsis and help thus far!!! I appreciate your help and truly feel blessed to be part of this forum. Saying thank you doesn't seem enough, but thank you!!!!! I am eagerly awaiting any and all details as they are released. I made sure that my contact info and address are all up to date and correct for when they let this dream unfold in real time.