Maria asks…
Appyling for Student Loan?
Hey, I was wondering where I can apply for a student loan. I was using Direct.Gov student finance but their incredibly annoying and wont let me apply. I just want to apply for a Tuition Fee Loan and a Maintenance Loan.
Can anyone tell me or point me to a simple what-to-do-step-by-step guide so I can actually apply for it? I just want those two loans.
Im applying for next years loans I should say.
I am year 13 now, im applying for 2012 Uni where the £9000 fee applies to me.
I think ive found out my problem, I think I only apply next year if im reading Student Finance right.
Nagesh answers:
Just the website. You could go to your local students financial services office however they will tell you to apply online if you are a 1st year student but its worth a try they might tell you something different or you could simply download the form and hand it in to them they will send it off for you and make sure you have provided any evidence needed to go with the form. The website it usually like that at this time of the year as you have left it late and missed the deadline
Donald asks…
what happens when my student loans default?
add cash and it will raise– ?? do not give answers that don’t make sense
what happens when my student loans default
What do you think- that question makes me wonder– what do you know about the financial aid offered at most institutions-anything at all?
Is there anybody there smarter than a 5th grader help
Nagesh answers:
If the loans are federal student loans (i.e. Direct Stafford Loans) the following things can happen:
The entire unpaid balance of your loan and any interest is immediately due and payable.
You lose eligibility for deferment, forbearance, and repayment plans.
You lose eligibility for additional federal student aid.
Your loan account is assigned to a collection agency.
The loan will be reported as delinquent to credit bureaus, damaging your credit rating. This will affect your ability to buy a car or house or to get a credit card.
Your federal and state taxes may be withheld through a tax offset. This means that the Internal Revenue Service can take your federal and state tax refund to collect any of your defaulted student loan debt.
Your student loan debt will increase because of the late fees, additional interest, court costs, collection fees, attorney’s fees, and any other costs associated with the collection process.
Your employer (at the request of the federal government) can withhold money from your pay and send the money to the government. This process is called wage garnishment.
The loan holder can take legal action against you, and you may not be able to purchase or sell assets such as real estate.
Federal employees face the possibility of having 15% of their disposable pay offset by their employer toward repayment of their loan through Federal Salary Offset.
It will take years to reestablish your credit and recover from default.
There are a number of things you can do to get out of default. Here is a link to a site that discusses some options:
http://www.finaid.org/loans/default.phtml
Nancy asks…
Student Loan Consolidation?
I have been trying for over a year now to get my student loans consolidated. Everywhere I have applied, they can only offer me a variable rate and I just don’t trust that. With this economy, there is no telling where those interest rates can go. I tried CU Student Loans which is where every single student loan consolidation website (Chase, Wells Fargo, Cedar) has taken me. Still no fixed rate. I saw a commercial for First American Student Aid so I gave them a call. They offered a great rate with a REALLY low payment based on my income. Right now I am paying around $410 a month for 3 student loans, and they offered me $185 payments as long as my income doesn’t change (I’m a teacher, so it won’t change enough to really affect the payment). This could all happen with a $999 fee that I could pay over 5 months. However, I can’t find any websites, reviews, not even any information about this place and that makes me uneasy. I have GOT to get my monthly payments lowered but seem to have run out of options.
Can anyone offer some advice? I’m open to anything at this point.
Nagesh answers:
I am in the process of filing a complaint about this company….Do not use them!!! There are a bunch of complaints on the web currently about their business practices and lawsuits underway. They say they work for US dept of Ed but then they told me they work with them…..very sketchy!! I consolidated with Direct Loan Services for Federal Loans and my private loans are already at a low interest rate so I am working hard to pay them off. I agree with the no-variable rate….and I know the desire to lower payments. Trust me I have been paying 500 a month since 2008. I could not find a better deal out there for lower interest rates for my loans yet (I am still open to it but they are private so I am not sure if I can consolidate). However, there is Obamas Federal Loan Debt Forgiveness program which maybe something you could qualify for? Hope I helped a little bit!
William asks…
Civil Action Taken Against Me Re: Defaulted Student Loan?
A letter was delivered to me from an attorney regarding a civil action lawsuit.
Here’s my case:
I have a defaulted student loan that just dropped off my credit report June 2007. I received a call from the law office that’s handling the file, regarding a payment plan. I set one up with them but did not follow through with it.
I received an “Order To Show Cause And to Compel” letter. The date passed on that one. Then I received another one which is scheduled for next month. And I’m also required to pay attorney fees, etc. The letter says if I don’t appear I may be arrested for contempt of court. I’ve never heard of this type of action being required because of a defaulted student loan.
I can’t afford to make any payments now and don’t want to get in trouble. Can someone who really knows about this type of thing advise me on what to do?
Please Help!!!!!!
Nagesh answers:
Okay – here’s some information:
The Federal Act that authorizes educational lending explicitly details the procedures that your loan holder must follow in attempting to collect on a student loan.
For the first 270 days after a “default” has occurred, your loan holder must make “diligent” efforts to collect the loan. In other words, they must make every effort to locate you, and to contact you repeatedly about repayment. If their efforts are unsuccessful, your loan will be turned over to the guaranty agency in your state.
Once your loan has been assigned to the guaranty agency for collection, the agency (and the Department of Education) can pursue any of the following methods to recover the outstanding balance that you owe:
1. The Department will authorize the Department of Treasury to offset your debt against any refunds or other payments due from the IRS or any other government agency. (They’ll keep your tax refunds)
2. The guaranty agency may assign collection to a private collection agency. (You will be responsible for any costs associated with the collection agency’s services)
3. The Department may order your employer to garnish your wages – which means that your employer would be required to withhold 15% of the part of your paycheck deemed “disposable pay” – and forward that money to the guaranty agency. (The Department’s idea of your disposable income is not the same as yours)
4. The Department will notify the credit bureaus of your default. Bad student loan debt is one of the worst forms of bad debt you can have on your credit record. Though this sounds relatively painless, you will have trouble buying a car or a house, or qualifying for a credit card for a long time to come.
5. The Department can sue you in state or federal court for the outstanding balance on your loan PLUS attorney’s and court fees. (Trust me, they won’t lose. Debt contract litigation is one of the most open-and-shut forms of legal action you can imagine. You signed a contract. The contract said you would pay. You’re not paying. You broke your promise. You lose the case. You pay your loan AND you pay a lot extra for court costs and attorney’s fees. “Your honor, I’m a nice guy” doesn’t get you much of anywhere.)
That’s all doom and gloom – but here’s the good news. The government really really really wants you to pay. Even if it’s slow. And if you prove you can’t pay now, they’ll give you another chance – only next time, they won’t play quite as nice, so you’d better be upfront with them in the future.
What are your options? These next passages are copied directly from the official government document – so excuse the convoluted language. I’ve attached a link to that document below – this is only some of the highlights of the information in the much longer document.
1. Borrowers can obtain a Consolidation Loan from a FFEL lender or from the Department to pay off qualifying education loans, usually over substantially longer terms, based on loan amount, than were available on the original loans (
• To apply for a Consolidation Loan, borrowers should contact a FFELP lender or, for a Direct Consolidation Loan, the Direct Loan Servicing Center (800-848-0979), or download a Direct loan application from http://loanconsolidation.ed.gov/forms.html.
2. FFELP Loan Rehabilitation is a repayment process for curing a default by making twelve (12) consecutive (on time) monthly payments and by then having the holder of the defaulted loan (the guarantor or the Department) sell the loan to a lender. The guarantor or the Department reinstates the loan guaranty upon sale to the lender, and the borrower then regains all the benefits of the original loan, such as rights to deferment and cancellation, that were lost when the loan defaulted.
3. A defaulted Direct Loan is automatically (“rehabilitated”) restored to normal servicing, with default status cured, after the debtor has made twelve (12) consecutive (on time) voluntary monthly payments.
Unlike FFELP, Direct Loan rules do not require a borrower to specifically request rehabilitation; rehabilitation for Direct Loans occurs automatically upon completion of the 12 qualifying payments. Servicing responsibility for the Direct Loan is therefore automatically transferred to the Direct Loan servicing system after the qualifying payments have been completed. The borrower then regains all benefits that are available to current Direct Loan borrowers, including deferments, forbearances, and choice of repayment plans.
Borrower regains eligibility.
Here’s the deal – there is NO escaping the US government. They WILL get their money back from you, one way or the other. Your best bet, at this point, is to make the process as easy as possible. The government allow you to refinance your debt over an even longer period of time, lowering your monthly payment considerably. Better yet, if you make a year’s worth of scheduled payments, your loan will be “rehabilitated”, which will allow you request a forbearance or deferment (postponement of payments) due to financial hardship.
Here’s the thing – you screwed up. If you hadn’t tried to run and hide from this debt, all you had to do was contact your loan servicing company (probably Sallie Mae) and fill out a form that said “I’m having a hard time paying my bills. Give me a break here.” and guess what? They would have. No questions asked. You wouldn’t have had to prove you were unemployed, or that your dog ran away, or that your transmission broke on the truck. All you had to do was ask.
If you want to get squared away, you need to step up to the plate now and take charge of this situation. Read the document that I linked below, and contact a customer service representative with the Department of Education at this number:
1-800-621-3115
Man, I hope that helps you out. Get to work!
Sandy asks…
What’s going on here? USDA direct loan?
So….the first thursday of September I went to my local USDA office and applied for a direct loan. I brought ALL of the informations with me so I could help speed up the process a bit. EVERYTHING they asked me for I brought. Filled out the application with an employee to be sure it was done correctly.
Now….almost a month later they send me a letter stating that my application has been selected for processing but I still need to send them pay stubs, bank statements, and an agreement for a credit check. I called to be sure there wasn’t a mistake.
I gave the stubs and bank statements when i filled the application. I’ve signed at LEAST two agreements for a credit check!
I feel like i’m jumping hoops and these people are jerking me around! Has anyone else had this problem?
Has anyone else here gotten a USDA direct loan? What was your experience? How long did it take?
I’m so entirely sick of being told to “be patient!” I’m already in contract with a seller and I’m afraid he’ll go back on the deal if I don’t get results soon.
Nagesh answers:
Well is sounds like the loan officer did not process your application when you presented it. When this happens you have to provide updated/current pay stubs and any other documentation that an underwriter requires.
The main issue you are going to have is you went directly to a government office where customer service is nonexistent. Think about any trip you’ve made to the DMV and multiply that by 10.
You should probably reconsider and work with a mortgage banker/broker who can offer the USDA guaranteed loan.
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