Download Crowe-power-point - FitzGerald Morris Baker Firth

Survey
yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the work of artificial intelligence, which forms the content of this project

Transcript
Everything You Need to Know
About Student Loans and
Protecting Your Credit
By: Michael Crowe, Esq.
FitzGerald Morris Baker Firth
www.fmbf-law.com
Student Loans – Federal vs. Private
• Federal loans are those either lent directly by the federal government
or backed (guaranteed) by the fed gov.
• Offer a variety of repayment options and deferment/forbearance
but have no statute of limitations on enforcement & can use other
gov benefits to satisfy.
• Examples – Perkins, Stafford, Parent PLUS
• Private loans are not originated or backed by the federal government.
• Usually originate from banks or Sallie Mae.
• Easier to obtain but have less options for structuring repayment.
www.fmbf-law.com
Federal Loan Repayment Options
• Balance Based Repayment – Term of 10 to 30 years. Duration dictates
monthly payment.
• Income Based Repayment:
• Income Contingent (ICR): capped at 20% of discretionary income. Monthly
payments adjust yearly. After 25 years the balance is forgiven.
• Income –Based (IBR): same as ICR but capped at 15%.
• Pay As You Earn (PAYE): capped at 10%, forgiven after 20 years, available only
for direct federal loans i.e. not Perkins or Parent PLUS.
www.fmbf-law.com
Deferment and Forbearance
• Both allow the borrower to postpone payments for a set amount of
time.
• The main difference is how the interest is handled.
• During deferment interest does not accrue for subsidized federal
loans and for unsubsidized the interest does not get added to
principal until the deferment period is over.
• During forbearance interest continues to accrue.
www.fmbf-law.com
Default and Rehabilitation
• Entire balance is due immediately, additional fees and penalties
accrue.
• Wages can be garnished without court order, tax refund and benefits
can be seized without court order.
• Rehabilitation
• 9 out of 10 timely “reasonable and affordable” payments.
• Consolidation with payment plan.
www.fmbf-law.com
Why Does it Matter?
• Interest! A $45,000 loan at 6.8% can add up to over $60,000 before
you even graduate and can start paying on it.
• Under a balance based plan over 30 years, the amount paid off will be
over $110,000.
www.fmbf-law.com
Protect Your Credit
• Check your credit card statements and dispute charges!
• Check your credit report regularly (www.annualcreditreport.com) and
well before applying for any major loan – auto or home.
• Dispute inaccuracies and mistakes.
• Add an explanation.
• Add positive information that is otherwise unreported
(employment, residence, contact information).
www.fmbf-law.com
Document related concepts

Debt wikipedia, lookup

Loan shark wikipedia, lookup

Continuous-repayment mortgage wikipedia, lookup

Adjustable-rate mortgage wikipedia, lookup

History of pawnbroking wikipedia, lookup

Payday loan wikipedia, lookup

Similar