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Taking DOE loan and having it purchased by a private lender?


blkchr91
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I have a federal student loan which I have had to defer year after year since 1999.

Naturally, the amount that I owe on the loan has ballooned into something pretty large.

I would like to make payments on the loan now that I am sort of in a position to pay back, but I would rather pay a private lender then the FED any day of the week even if it costs me more P&I.

I don't want the FED taking money from my social security check one day if I fall into hard times again!

I have enough hassle with so called "child" support drawing blood from a rock, and handling both of these "priority" debts simultaneously is enough to make most people....well never mind.

Thank you in advance.

*I have seen how things work in this sub-forum for whatever reason. If you get smart with me, then I will get smart right back. This is your warning.*

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You can consolidate your loan with a private lender that participates in the FFELP if you haven't already consolidated.

Your interest rate will be the same as or very close to what it is now (weighted average rounded up to nearest .25%, not to exceed 8.25%).Your loan will still be federally backed, and if you default it will eventually be assigned to the feds.

The only way to get completely out of the federal system would be to get a personal loan from a bank and use the proceeds to repay your federal loan. If you did that you would no longer have an "educational loan", and could lose tax benefits. It would also not be federally insured. The terms, and your ability to obtain such a loan would be credit-based.

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You can consolidate your loan with a private lender that participates in the FFELP if you haven't already consolidated.

Your interest rate will be the same as or very close to what it is now (weighted average rounded up to nearest .25%, not to exceed 8.25%).Your loan will still be federally backed, and if you default it will eventually be assigned to the feds.

The only way to get completely out of the federal system would be to get a personal loan from a bank and use the proceeds to repay your federal loan. If you did that you would no longer have an "educational loan", and could lose tax benefits. It would also not be federally insured. The terms, and your ability to obtain such a loan would be credit-based.

Extremely clear...thank you! If I defaulted on the "FFELP" program (thereby consolidating my loan) would I still be subject to the same liabilities e.g. getting my SS garnished etc?

What is the advantage of the FFELP (on the surface at least) if you don't mind my asking?

What is the advantage of consolidating my loan if any? (I don't have any other student loans, but have other debts that aren't student loans). FYI, I have never consolidated my loan.

I thought consolidation was simply taking multiple debts and combining them into one.

Any other advantages/disadvantages to the FFELP?

Thank you for your time!

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You can consolidate your loan with a private lender that participates in the FFELP if you haven't already consolidated.

Your interest rate will be the same as or very close to what it is now (weighted average rounded up to nearest .25%, not to exceed 8.25%).Your loan will still be federally backed, and if you default it will eventually be assigned to the feds.

The only way to get completely out of the federal system would be to get a personal loan from a bank and use the proceeds to repay your federal loan. If you did that you would no longer have an "educational loan", and could lose tax benefits. It would also not be federally insured. The terms, and your ability to obtain such a loan would be credit-based.

Extremely clear...thank you! The only question that remains would be if I defaulted on the "FFELP" program would I still be subject to the same liabilities e.g. getting my SS garnished etc?

What is the advantage of the FFELP (on the surface at least) if you don't mind my asking?

Any other advantages/disadvantages to the FFELP?

Thank you for your time!

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If you default on a FFELP loan, the private lender will file a claim, get reimbursed by the government, and then the same things can happen as with a DOE "Direct" loan. (A state guarantee agency will first take the loan, and if they don't collect it will end up with the DoE).

The benefits to FFELP loans are virtually identical to those of Direct loans. The government pays the interest on subsidized loans during deferments and while in school in both programs, for example.

Direct loans used to have an advantage with the income-contingent repayment plan, but the FFELP program now offers an almost identical income-based repayment plan.

Both programs have the same forgiveness options. The interest rate for consolidation loans is the same with both programs, although a FFELP lender can charge you a lower rate then the statutory rate if they choose to.

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Thanks for all.

So for all intensive purposes, there is no difference whether or not I go FFELP or not to alleviate my concerns. I would need a bank loan for that, where the interest is not tax deductable.

What about the consolidation aspect? I only have one student loan, so consolidation won't do anything for me will it?

It seems that it is a matter of either:

a) Working with DOE to lower payments.

B) Getting a bank to take my loan over.

Is that what it boils down to?

Thanks

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So for all intensive purposes,

'all intents and purposes'

(Not getting smart, I promise..., but really thought you'd want to know, I could just tell that wasn't a typo. http://wiki.answers.com/Q/Is_the_saying_'all_intents_and_purposes'_or_'all_intense_purposes' )

Also, I don't know what your issue is with paying the Fed back, but why won't you consider a loan rehab?

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'all intents and purposes'

(Not getting smart, I promise..., but really thought you'd want to know, I could just tell that wasn't a typo. http://wiki.answers.com/Q/Is_the_saying_'all_intents_and_purposes'_or_'all_intense_purposes' )

Also, I don't know what your issue is with paying the Fed back, but why won't you consider a loan rehab?

Alright, so I don't have a full handle on the English language even at my age.

That's fine, provided you aren't getting smart.

Why would I consider a loan rehab? Isn't that only for a loan that I have defaulted on?

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Alright, so I don't have a full handle on the English language even at my age.

That's fine, provided you aren't getting smart.

Why would I consider a loan rehab? Isn't that only for a loan that I have defaulted on?

When people were telling me "granted", I always thought it was "grant it", until I was corrected when I was younger. It kind of reminded me of that, but I also wanted to make it clear that I wasn't being one of those smart alecs.

I reread your original post. You aren't in the rehab stage (GREAT for you).

Have you considered getting a signature loan from a bank to pay off the student loan since that's what you want to do? I would imagine if things ever got bad, you could always call your servicer and make arrangements. I am told that folks work with you when you do that. Reason why I never did was because I didn't care. That's why those in the (student loan) industry act all high and mighty...because now we do care and they just want to spit on us. But if you haven't messed up yet, you still have hope by calling them.

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When people were telling me "granted", I always thought it was "grant it", until I was corrected when I was younger. It kind of reminded me of that, but I also wanted to make it clear that I wasn't being one of those smart alecs.

I reread your original post. You aren't in the rehab stage (GREAT for you).

Have you considered getting a signature loan from a bank to pay off the student loan since that's what you want to do? I would imagine if things ever got bad, you could always call your servicer and make arrangements. I am told that folks work with you when you do that. Reason why I never did was because I didn't care. That's why those in the (student loan) industry act all high and mighty...because now we do care and they just want to spit on us. But if you haven't messed up yet, you still have hope by calling them.

Lol, I was the same with granted to! I might just do that. Thank you for your info and time. Once you have the "child" support system arguing with you, you are forever changed. I get abused just for paying on time, and on a regular basis. It seems as if these creeps would rather see you in jail then paying. Student Loans are the same animal to me, although I have never been annoyed by them to the degree that I have with so called "child" support. I am just being extra careful based on my experiences in that "child" support will not work with you if you have any issues. You are toast, and it seems that is exactly what they want you to be.

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Lol, I was the same with granted to! I might just do that. Thank you for your info and time. Once you have the "child" support system arguing with you, you are forever changed. I get abused just for paying on time, and on a regular basis. It seems as if these creeps would rather see you in jail then paying. Student Loans are the same animal to me, although I have never been annoyed by them to the degree that I have with so called "child" support. I am just being extra careful based on my experiences in that "child" support will not work with you if you have any issues. You are toast, and it seems that is exactly what they want you to be.

Definitely let us know how those arrangements with your student loans work for you.

As for your child support issues, I know that there are some trifling people out there that abuse that immensely. Those folks won't even remarry on purpose just so that they can get your loot while they are with the next one...spending your hard earned cash on stuff that's not even for the kid. I'm sure you will find alot of folks on here that can relate with you more.

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Definitely let us know how those arrangements with your student loans work for you.

As for your child support issues, I know that there are some trifling people out there that abuse that immensely. Those folks won't even remarry on purpose just so that they can get your loot while they are with the next one...spending your hard earned cash on stuff that's not even for the kid. I'm sure you will find alot of folks on here that can relate with you more.

Will do so, once I can get on my feet a little bit more. It won't be long. BTW, a new marriage doesn't preclude "child" support, it just precludes alimony in some states. (I always put it in quotes because I know it isn't going for my child). I was once unable to pay for a month and my ex stood five feet in front of me and went on about how she couldn't get her nails done due to that. :mrgreen:

The bottom line is that it doesn't make sense to have to pay someone for the disservice of taking your child away, especially when you (like 95% of parents I would guess) wanted joint custody in the first place and were never proven to be unfit to begin with. It is MUCH more than a coincedence that the system is so lop-sided in that one parent usually gets to pay support and simply amazing that a parent is able to parent prior to a divorce, but almost always "magically" loses the capacity to parent in favor of becoming a visitor in a childs life after a divorce. A judge can magically decide within 5 minutes that you are no longer fit as a parent, but better off as a visitor in your child's life...so long as you don't forget to be a "responsible" parent and pay for a choice that was probably made by a judge who probably lacked a valid oath! It was my choice to have a child, but far from my choice to be seperated from them.

This is the student loan section, so I will stop even though I am and always will be fired up about it until positive changes take place to that system!

Student loans and child support seem to have some similarities on the negative side.

Dealing with them both simultaneously, well that's always fun. :mrgreen:

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