Education loans : Your Student Loan Questions: Spousal Debt, Default, Co-Signers - PowerPoint PPT Presentation

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Education loans : Your Student Loan Questions: Spousal Debt, Default, Co-Signers

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Education loans come with repayment plans that can decrease the amount you pay each month based on your income and family size, and eligible payments can be as little as zero dollars. Borrowers also may be able to temporarily pause their payments with a deferment or forbearance. – PowerPoint PPT presentation

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Title: Education loans : Your Student Loan Questions: Spousal Debt, Default, Co-Signers


1
Education loans
2
Your Student Loan Questions Spousal Debt,
Default, Co-Signers
3
  • Dealing With Default
  • Q My son holds direct student loans that are in
    default. We have the ability to pay off the
    balances in full. What effects will doing so have
    on his credit reports in the future? What gets
    removed from his credit report record and what
    stays, and for how long?
  • A Defaulting on a student loan comes with a
    number of potential consequences, including
    collection costs, garnishment of paychecks and
    seizure of government payments, such as tax
    refunds and Social Security. The default also
    goes on the borrower's credit history, which may
    affect his or her ability to lease a car, get a
    mortgage or qualify for additional debt down the
    line.

4
  • Borrowers facing this situation may benefit from
    a different strategy rehabilitation.
  • When a borrower rehabilitates a federal student
    loan, he or she agrees to make nine consecutive,
    on-time reasonable payments.
  • This process will remove the default line from
    the credit report altogether though the
    delinquencies that led up to the default will
    remain.
  • In addition, it will lower collection costs,
    decreasing the balance you pay off thereafter.

5
  • Releasing a Co-Signer
  • Q Is it possible for a student to release a
    parent from future liability for outstanding
    student loan debt that parent co-signed for? I
    can't imagine that a lender would agree to
    release a parent that is already committed as a
    co-signer. If this is possible, who would
    generate the paperwork?
  • A When looking to close a tuition gap, many
    families turn to private student loans. As the
    student is typically young and lacking credit
    history, his or her parents often have to co-sign
    meaning they take on equal responsibility for
    the amount borrowed.

6
  • Tackling Spousal Debt?
  • Q I have graduated. I have 120,000 in student
    loans. My husband has around 30,000 and didn't
    deal with it, so his wages are ?garnished and
    they take our tax returns. I don't want this
    problem with my loans. There is no way I can pay
    them.
  • A As mentioned previously, seizure of tax
    refunds is a consequence of default one many
    borrowers are likely dealing with right now.
    Unfortunately, couples who file taxes jointly
    receive a single refund, which means the whole
    family suffers from an individual's default.
    Borrowers can take steps to get out of this
    situation. However, it's best to avoid default
    altogether.

7
  • Education loans come with repayment plans that
    can decrease the amount you pay each month based
    on your income and family size, and eligible
    payments can be as little as zero dollars.
    Borrowers also may be able to temporarily pause
    their payments with a deferment or forbearance.
  • Ultimately, if you're facing debt you feel you
    can't handle whether it's more or less than
    120,000 contact your loan's servicer
    immediately. The servicer can talk you through
    your potential options before you fall behind on
    your payments.
  • Source http//bit.ly/1XNbYcR
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