Your Questions About Direct Loans

Nagesh answers:

You don’t go directly through USDA. USDA is not a lender. Any loan officer or mortgage broker that offers that product can help you. Once underwriting clears the loan they will send it off to USDA for final approval.

Check out this website. You can plug in a potential address to make sure that the propety qualifies, you also need to meet income guidelines which all can be found out on this website:

http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

Click under property eligiblity and income eligiblity links that are on the front page for more info.

Why do you want to do direct USDA and not a Guaranteed USDA?

Nagesh answers:

Chances are slim. But not impossible.

Student loan debt is non-dischargeable in bankruptcy unless the debtor can prove that paying back those student loans would cause an undue hardship. 11 U.S.C. § 523(a)(8). That means that the debtor must file an Adversary Proceeding in bankruptcy court and prove an undue hardship exists.

Regular hardship is insufficient. You must prove ‘undue’ hardship. Part of proving undue hardship is proving that, even if you made a good faith effort, you would be unable, within your lifetime, to pay back a substantial portion of the debt.

For example, you might be able to prove this if you have a terminal illness that prevents you from working such as stage 3 lung cancer or serious mental illness.

Doing so is no small task; in fact, it is full-blown litigation requiring documented evidence, expert witnesses, and all the while the other side having unlimited resources using every litigation trick in the book to wear you down (e.g. Motions for summary judgment, 8 hour depositions, challenges to evidence you wish to present, not cooperating with discovery, etc). After all, it is official Department of Education policy to oppose bankruptcy discharge of student loan debt. 34 C.F.R. § 674.49(C) and 34 C.F.R. § 682.402.

As a final note, if you have some type of hardship circumstance, Federal student loans have hardship programs. For some people, it is easier to qualify for that hardship program than it is to discharge that debt in bankruptcy.You say that you have ‘student loans’ and then you want to know if they are dischargable. The answer is no. Student loans are not dischargable in bankruptcy unless you can prove an

But, the real question you have is, are these ‘student loans’?

In your description of the loans there isn’t enough information to give you a definitive answer. Hopefully, the following information will help you find your answer.

AES is basically a loan servicing company. Unfortunately, their website does not give any details about whether they only service qualified student loans such as FFELP(1) or PLUS(2).

For your ‘direct loans’ you don’t indicate if that is a direct loan from a lender or if it is a U.S. Department of Education Direct Loan. The difference could be the determining factor for whether the debt is dischargable.

The types of loans that will be non-dischargable are as follows:

1. An educational loan made, insured, or guaranteed by a governmental unit;
2. An educational loan made under any program funded, in whole or in part, by a governmental unit or non-profit institution; and
3. Any type of educational loan that is a qualified education loan as defined by internal revenue code section 221(d)(1).

For bankruptcy discharge purposes, these are ‘student loans’. The ‘student loan’ exception to discharge does not apply to any other types of loans, even if the funds were used to pay education expenses. This means that if you pay tuition with a credit card, for example, the credit card debt is not a ‘student loan’. It therefore, may be discharged in a bankruptcy.

The bankruptcy code provides many types of exceptions to discharge. For the credit card debt, I don’t have enough information to assess the dischargability of the debt.
________
(1) Federal Family Education Loan Program
(2) http://en.wikipedia.org/wiki/PLUS_Loan
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Nagesh answers:

Never heard of this & I do RD (USDA) loans all the time.

Nagesh answers:

It is usually a few days to about a few week process, depending on if everything was done online or if you had to mail some paperwork. I would be concerned.

Is there a reason you chose to consolidate with a lender instead of Direct Loans? If you have already signed for the paperwork with the lender, then you will need to consistanly call and keep on top of them until the process is complete.

I would also check out how reputable the lender is. It seems that everyone is in the student loan consolidation business these days. Lenders like Sallie Mae, Chase, PNC, CitiBank, Teri Loans, Wachovia, SunTrust these are are all reputable lenders.

Good luck!

Nagesh answers:

No it is not based on age. It is based on the time when your are done with college(degree completed or not). One suggestion I will make is consolidating your loans into one if you have not already while interest rates are low. I thought you had to take 12 hrs. A semester to defer your loans.

Here is a good website to look at for student loans
http://www.salliemae.com/

I have never heard of direct loans so I don’t know what they offer or don’t.

You can email me if you have any more questions at
mikah_nine@yahoo.com