Student Loan Counseling
If you're having trouble paying your student loans, student loan counseling can help you evaluate your options so you can make an informed decision. If you're struggling with credit card debt, a free credit counseling session will provide you with a customized budget and action plan for moving forward. You may even qualify for a debt management program that could help you get out of debt more quickly while saving thousands of dollars in interest. We can also help if you're concerned about buying a house or making your mortgage payment.
Focused Help With Student Loans
GreenPath will touch on some basic strategies regarding student loan repayment as part of a free credit counseling session. If you want more focused assistance with your student loan situation, you may want to consider a student loan counseling session.
As part of a student loan counseling session, GreenPath will:
- Help you access your federal student loan information through the National Student Loan Data System.
- Thoroughly explain your specific student loan repayment options, and the pros and cons of each, so you can make an informed decision.
- Contact your servicer(s) regarding repayment options.
GreenPath can help you make an informed decision on strategies to postpone payment, reduce payments or consolidate loans.
Strategies to Postpone Payments
GreenPath can help you evaluate short-term strategies to postpone federal payments, such as deferment and forbearance. Use these options with caution because interest usually continues to accrue and your debt balances grow.
Strategies to Reduce Payments
We can explain longer term strategies that reduce federal student loan payments. These include graduated and extended payment plans, loan consolidation and federal programs such as Income Based Repayment (IBR), Pay As You Earn (PAYE) and Public Service Loan Forgiveness (PSLF).
We can help you decide when and if it makes sense to consolidate your loans. Consolidating loans is similar to refinancing a mortgage. You must consider origination fees, prepayment penalties and new interest rates. You can only consolidate a loan once, so make an informed decision before doing so.
What should I do if I can’t afford my student loan payments?
Contact your servicer to discuss your options. You can switch payment plans at any time, so you should consider one of the income-driven plans or an extended payment plan. You may be able to skip payments through a deferment or forbearance, but interest may continue to accumulate. If you’re having trouble, GreenPath can help you determine the best repayment options and then help connect you with your servicer.
Is it possible to lower my student loan payments?
It may be possible to lower your monthly student loan payment on federal student loans. (Private lenders are not obligated to modify payment terms.) You can switch federal student loan payment plans at any time. You may be able to skip payments through a deferment or forbearance, but interest may continue to accumulate.
What is a student loan servicer?
A student loan servicer handles billing and payment processing, provides customer service and implements repayment plans. The U.S. Department of Education transfers your direct subsidized and unsubsidized loans to a loan servicer. Some of the largest student loan servicers are Great Lakes, FedLoan Servicing, Nelnet and Navient (formerly Sallie Mae).
What is the difference between subsidized and unsubsidized federal student loans?
You pay no interest on subsidized loans while you’re in school. So, what you borrowed should be what you owe when you begin repayment. Interest always accumulates on unsubsidized loans. When an unsubsidized loan enters repayment, it gets capitalized -- the loan balance will be higher than what you initially borrowed.
What is loan consolidation?
Consolidation combines multiple federal student loans into one single loan with one monthly payment. It has a fixed interest rate based on the weighted average of the interest rates on the loans being consolidated. The process of consolidating federal loans cannot be reversed, so before consolidating make sure it’s the best option for you.
What are the advantages of consolidating my student loans?
It’s easier and simpler to deal with one loan payment instead of multiple student loan payments. If you have variable interest rates, consolidation locks you into a fixed interest rate. You can also lower your monthly payment amount by extending your repayment period from 10 years up to 30 years, depending on the size of your debt. However, increasing the length of your repayment period will result in you paying more in interest --- potentially a lot more money --- over a much longer period of time. You would also lose any benefits associated with the original loans. If you need assistance, GreenPath can help you determine if loan consolidation is a good option for you.
How can I get my student loans forgiven?
If you work for a nonprofit organization or government agency, loans you received under the Federal Direct Loan Program MAY qualify for forgiveness as part of the Public Service Loan Forgiveness program. After making 120 qualifying monthly payments on qualifying direct student loans, while working full-time for a qualifying employer, the remaining balance on those loans may be forgiven. Loans made prior to July 1, 2010 --- before the U.S. government began its direct lending program --- do NOT qualify. Perkins loans also do not qualify for the Public Service Loan Forgiveness program. Eligibility is based on numerous factors, so it is best to speak to your servicer or a student loan counselor to review your options.
What should I do if I have defaulted on my federal student loans?
Contact your servicer or the collection agency immediately. They can assist you with options to bring the defaulted student loan(s) current. When you are in default, additional collection costs are typically added to your loan balance. Generally, two options may exist:
- Student loan rehabilitation – After completing the rehabilitation program (usually 9 payments), the loans will be taken out of default status.
- Student loan consolidation – If eligible, your servicer can consolidate your student loans into a new loan and this will take your loans out of default status.