For most student loan borrowers, SAVE is by far the best federal student loan repayment plan. It has the most generous definition of discretionary income, requires borrowers to pay the smallest percentage of their income, and has a generous subsidy that can help borrowers with monthly interest charges. Unfortunately, SAVE isn’t always the best choice. SAVE doesn’t have a cap on monthly payments, and IBR and PAYE offer monthly payment caps. What happens to borrowers earning so much money in the future that SAVE becomes more expensive than IBR and PAYE? The PAYE and IBR Payment Caps and the Dang ..read more

After the Supreme Court struck down Biden’s one-time plan to forgive up to $20,000 per federal student loan borrower, a recent lawsuit has many borrowers and student loan advocates concerned that the new SAVE repayment plan might face the same fate. Although headlines make the lawsuits appear similar, key differences suggest that this particular lawsuit will be unsuccessful. A Note from the Sherpa: In this article, I’m going to explain why I think borrowers will be happy with the eventual outcome of this lawsuit. Before jumping into the analysis, however, there are a couple of thoughts I shoul ..read more

Sloan is the newest servicer of federal student loans. Unlike bigger servicers like Nelnet and MOHELA, Sloan will only handle one specific type of federal loans: commercial FFEL loans. What does this mean for borrowers? Dealing with a new servicer is always a headache, but by specializing in commercial PLUS loans, the hope is that servicer guidance will be more accurate. Most importantly, if you have loans serviced by Sloan, the odds are pretty good that you are missing opportunities for lower monthly payments and earlier loan forgiveness. The key nugget of information is that commercial FFEL ..read more

The process of student loan consolidation can take as little as a couple of weeks to as long as several months. The total amount of time and the exact number of steps depends upon several factors. The most significant factor affecting the consolidation timeline is whether the consolidation is done through the federal government or a private company. Before jumping into any specific timelines, it is important to first explain the difference between refinancing and consolidation: When you pay off your existing loans and replace them with a new one, it’s called consolidation if the government is ..read more

When writing about student loan strategies and explaining rules, I don’t like to talk about myself. My opinions don’t matter, and my motivation for covering a subject really doesn’t matter. However, in the case of the Parent PLUS double consolidation loophole, some context is critical. This site hasn’t covered this loophole because it is complicated, and it is easy to make a mistake that can’t be fixed. More importantly, the loophole exists by exploiting a bug in the Department of Education recordkeeping system. Until recently, the Department of Education could have simply fixed the bug, and b ..read more

If you’re not happy with your current repayment plan, interest rates, or the customer service from AidVantage and can’t afford to pay off your loan, consolidating your student loans might be the solution. Consolidation is quite straightforward: it replaces your old loans with a new one. You can consolidate just some or all of your loans. After consolidation, your old loans are considered paid off, and you start repaying a new loan, ideally with better terms. For AidVantage loans, you have two consolidation options: federal and private. Federal consolidation is done through the Department of Ed ..read more

We have hardly seen any interest rate movement thus far in 2024. One notable aspect of the market is that the majority of lenders are now offering lower rates on fixed-rate loans compared to variable-rate loans. This is a departure from the usual trend. For most borrowers, opting for a fixed-rate loan right now is probably the smart move. Not only do these loans offer excellent rates in comparison to variable-rate loans, but they also safeguard against future rate increases resulting from inflation. Furthermore, if rates were to drop in the future, borrowers could always refinance again. In th ..read more

One of the standout features of the new SAVE plan is its accelerated loan forgiveness. Borrowers with balances up to $12,000 may qualify for forgiveness in just 10 years. While $12,000 of forgiveness after 10 years sounds like an easy concept, there has been a lot of confusion. For example, many readers have written asking if the forgiveness is per loan or based on the total balance. I’ve even received some reports from readers who were given inaccurate information from their loan servicer. This post should cover all of the fine print. Where the Department of Education hasn’t been clear, I’ve ..read more

It would take hours to document and explain all of the student loan changes over the past few years. One of the big changes that many borrowers may have missed: the Department of Education will now cover some or all of the monthly interest for millions of borrowers. If you are familiar with the SAVE subsidy, this isn’t breaking news. If you haven’t heard about the SAVE subsidy — pay close attention. This particular assistance is something that will make a huge difference in borrower finances. Why the Government Pays Interest for Some Borrowers Before jumping into the program details, it is hel ..read more

The student loan repayment restart has been rough for millions of borrowers. New federal data shows how bad things have gotten: 2 out of every 5 borrowers haven’t been able to pay their bills. Based on my conversations with borrowers, there are three primary reasons people haven’t made payments. Issue 1: Servicer Problems are a Roadblock to Making Payments At this point, federal student loan servicing at the restart has been a well-documented mess. Expecting borrowers to wait for an hour or two on hold is unreasonable. Likewise, giving borrowers conflicting information will only create more pr ..read more