David asks…
When one is determined totally disabled, how are student loans paid off does it affect credit scores?
I am totally disabled and have student loans, if they are paid off by the government, how is my credit affected and how is the debt reported on my credit report?
Nagesh answers:
One is determined totally and permanently disabled when the person is no longer able to work and earn money because of an injury or illness that is expected to continue indefinitely or result in death. For example: you loose the ability to walk, you loose sight, you are bed-ridden, etc.
Other definition:
If a borrower is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment that can be expected to result in death, has lasted for a continuous period of not less than 60 months, or can be expected to last for a continuous period of not less than 60 months, the borrower may apply for a total and permanent disability (TPD) discharge of his or her Federal Family Education Loans (FFEL), Perkins Loans, William D. Ford Federal Direct Loans (Direct Loans), or Teacher Education Assistance for College and Higher Education (TEACH) Grant service obligation.
Also, the loans are not paid off by the government, they are just forgiven, just as you never borrowed it, so it has no affect on your credit report as far as raising your credit score or lowering it.
Ken asks…
Can my student loans be forgiven by joining the military?
I was wondering if there’s a way to get my student loans forgiven by joining any branch of the military?
Nagesh answers:
Actually, they can… As long as they are FEDERAL loans (i.e. Direct Loans) and you perform 10 years of public service (i.e. Military service… And you MUST stay in for atleast 10 years)… And make atleast 120 payments. After the 120 payments, the remainder of your balance is forgiven. For more information, contact your federal loan provider.
I am not participating in this program because I don’t intend to stay in the military for 10 years and I don’t plan on making 120 payments either… I am trying to repay this loan in a much shorter period of time…
HDH: I ALMOST joined the Army because of the amount of money that they repaid towards your student loans (and those hefty signing bonuses), BUT the majority of my student loan debt was from my private loans; not my federal loans. Also, I could not have took advantage of the MGIB benefits because you cannot do the college loan repayment program and the MGIB during the same enlistment (and I don’t know if I’ll re-enlist). I thought that the MGIB would better benefit me more, so that’s what I chose. It does suck that the AF only repays $10,000 towards student loan debt while other services offer more than quadruple that…
James asks…
Should I use new loan money to pay off old?
I have past student loans I owe. I am starting a MBA program this fall. Should I take out the maximum amount available this time and use the surplus to pay off the previous debt- to lower or halt interest? That is, if the interest rate I get is better? Is this a stupid idea? Thanks!
Nagesh answers:
First thing if you are consolidating always go thru the federal govt. That is direct. Here are some pho nums may help. 1-800-557-7392 , or Fed aid borrower services will always be helpful, 1-800-433-3243. Try to avoid private loans, unless absolutely necessary, the banks new policy for lending re stu loans, now has more to do on what you are studying than cr score. If you are studying DNA technology, some high tech med thing for intance (example) and you have a 520 cr score, and someone else is going for a masters in English, to be a teacher, they would rather lend to the lower credit score w/a higher potential for earnings.
Consolidations are all the same interest rates, though if you have staffords that are non subsidized they will accumalate interest.
If you are going right back to school you wouldn’t have to worry about going into repayment, just worry about those staffords accumulating interest. So if you are all subsidized , unlikely, but Fed aid num above can tell you, you wouldn’t have to worry, consolidate after graduation. Otherwise consolidate now, lower rate, direct, loan goes on hold for just six credits even if online course, and consolidate six months afeter graduating, conslolidate the old loan and any additional loans that you are taking out for the MBA.
You have six months grace inbetween leaving school for any reason and repayment. Also get in touch with and stay in touch with higher ed watch, this is the student loan lobbying group, put in your browser, and search, I have some info on my website, extra numbers and link right to finaid.
Should be easy, all stu loan rates coming down thru DIRECT.
Carol asks…
On Federal Direct Unsubsidized Loans, how do you select a payment option?
I know I for sure want to pay the interest quarterly on my federal unsub loan…
when do i set up this option? is it through the financial aid office at my college?
Nagesh answers:
Payments are done through the Direct Loan Servicing website at:
https://www.dl.ed.gov
Lizzie asks…
Do I have to pay a fee to receive my direct deposit refund when I efile?
I’m thinking of doing my own taxes this year either thru HR Block online or Turbo Tax online. If I’m to receive a refund, do I have to pay a fee for that or do they just send it once everything is approved? I know when I went to HR Block personally I would have to pay a fee, but I don’t know if that was to pay for the services or to get a rapid refund. Thanks in advance.
Great! So if I receive a refund, how long does it normally take to direct deposit it via Tax Act or any of those sites on irs.gov?
I live in Florida so thankfully I don’t have to file any state taxes 🙂
Nagesh answers:
You shouldn’t have to pay a fee to receive your refund unless you’re getting some kind of loan or a rapid refund. So you should end up paying the $29.95 or whatever for using Turbo Tax or H&R Block to file and that’s it.
My advice, though, is if you’re going to use an online web site to file, go with TaxAct. It’s the same type of program as Turbo Tax and it only costs $16.95 to file both federal and state return. I’ve used TaxAct the past five years and have never had a problem.
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