Expand Your Student Loan Knowledge
This is material I thought would be worth sharing courtesy of my Financial Planning Software Provider RightCapital. We believe it is important to be an informed consumer of college education and want people to have an education on these programs with the hope of minimizing or even avoiding take on debt to pay for college. This article includes facts and information that will help you to understand the nuances of college debt.
Federal Student Loans
Federal student loans are offered by the government, with terms and conditions that are set by law. These loan types include many beneﬁts such as a ﬁxed interest rate, income driven repayment plan options and eligibility for Public Service Loan Forgiveness (PSLF) not typically offered with private loans.
Private Student Loans
Private loans are offered by private organizations such banks, credit unions, and state- based or state-afﬁliated organizations. These loan types have terms and conditions that are set by the private lender. Private student loans are generally more expensive than federal student loans.
Below is a graph that outlines different types of student loans and categorizes them by federal and private lenders.
A loan servicer is a company that is assigned to handle federal student loan debt on the government’s behalf. The loan servicer will assist you with tasks related to your federal student loans. You can contact the loan servicer to obtain standard 10 year payment, new borrower status information or any other relevant information. If your circumstances change at any time during their repayment period, the loan servicer will be able to help. If you are unsure of your loan servicer look for the most recent communication from the entity sending bills for the loan payments.
Below is a list of loan servicer’s and their contact information. These contacts can be used to gather additional details needed for an in-depth student loan analysis.
Loan Servicer Contacting Information
Federal Student Aid Information Center (FSAIC) at 1-800-433-3243.
|FedLoan Servicing (PHEAA)||1-800-699-2908|
|Granite State – GSMR||1-888-556-0022|
|Great Lakes Educational Loan Services, Inc.||1-800-236-4300|
Loan Servicer Contact
1-800-621-3115 (TTY: 1-877-825-9923 for the deaf or hard of hearing)
Student Loan Repayment Plans
Student Loans can be repaid in a variety of different methods depending on the your situation. The different plans may seem similar, but each has distinct pros and cons. Note that if you didn’t choose a repayment plan, the loan servicer will automatically place you on the Standard Repayment Plan.
Income-driven repayment (IDR) plans are designed to make student loan debt more manageable by reducing the monthly payment amount. If you need to make lower monthly payments or if your outstanding federal student loan debt represents a signiﬁcant portion of your annual income, one of the following income-driven plans can be used. After 20 to 25 years of steady repayment, the remaining balance is forgiven
Income Driven Repayment Plan
REPAYE Generally 10% of discretionary income
PAYE Generally 10% of discretionary income
IBR Generally 10% of discretionary income if you’re a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount. Generally 15% of discretionary income if you’re not a new borrower on or after 7/1/2014, but never more than the 10-year Standard repayment plan amount
Creating a retirement paycheck that generates the income you need while keeping you in the lowest possible tax bracket isn’t as easy as it seems. All the planning you did while working – like saving retirement funds in tax-deferred accounts and diversifying by purchasing a second home, can turn into tax bombs as you move through retirement.
The consequences of higher income aren’t limited to a bigger tax bill – they can also include expensive Medicare surcharges.
What’s the solution?
You saved diligently, invested carefully, and now you have a sizeable nest egg that can most likely replace 80% of your pre-retirement income. Why should you go through the tiresome process of creating a budget?
Those four years when your child is in college can be a rollercoaster ride, but the scariest part for high-earning parents can be figuring out how to pay for it. It can be tempting to put your own goals on hold while you shoulder the big-but-temporary new burden. In this blog we discuss strategies for paying for college and having a plan to pay for 4 years of college down to the penny.
At University Financial Strategies our mission is to help families think beyond just saving for college, but helping leverage strategies that leverage your unique situation to help you save on college costs. We take into consideration topics like specialized college-planning strategies for business owners, planning for financial aid, school-specific scholarships, coordinating college planning with grandparents, cash-flow strategies and options for covering shortfalls, to name just a few.
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