Student Loan Debt Consolidation
While we are still keeping a close eye on developments in bankruptcy court and other areas to help our clients eliminate student loan debt, one resolution that may be of tremendous benefit is to consolidate your student loans. One of the best programs we’ve seen is the William D. Ford Direct Loan Consolidation Program.
Consolidation of student loans provides a great benefit in that it takes many loans and combines them into one payment with one interest rate, with one lender. Also, in some situations, consolidation under the Ford Program may reduce your monthly payment to $0, temporarily, while still reporting your loan payment status as current. Loan repayment is based on income and the ability to repay meaning the repayment amount is flexible year to year. Also under the Ford Program, loans are forgiven after 20 – 25 years of on time payments (including payments of $0.00). That means that if there is any balance left over after 20-25 years, depending on your specific program, that balance is waived.
However, there are some drawbacks to consider as well. If your loan repayment term before consolidation is less than 20 – 25 years, consolidation under the Ford Program will extend the repayment term. Also, if you have negotiated favorable terms with your student loan company, those terms will be lost in consolidation (although, hopefully, replaced with more favorable terms under the Ford Program).
The following student loans are eligible for this program:
- Direct Subsidized
- Direct Unsubsidized
- Federal Perkins Loans
- Plus Loans
- Stafford Unsubsidized
- Stafford Subsidized
- Supplemental Loans for Students(SLS)
- Federal Nursing Loans
- Health Education Assistance Loans
- FFEL Loans (must be consolidated with another loan, or applying for PSLF)
We will continue to monitor legal developments in the Student Loan realm. Please continue to check back for more details.
For more information on bankruptcy, foreclosures, loan modifications, short sales, and a variety of other topics, please subscribe to the Yesner Law Podcast, on iTunes and Stitcher. If you prefer, please contact us to schedule a free initial consultation to discuss your options at 727-261-0224 or email me directly at shawn@yesnerlaw.com.
Shawn M. Yesner, Esq., is the founder of Yesner Law, P.L., a Tampa-based boutique real estate and consumer law firm that helps clients eliminate debt by providing options, so they can live the lifestyle of their dreams. We assist clients with Chapter 7 liquidation, Chapter 13 reorganization, bankruptcy, foreclosure defense, debt settlement, asset protection, the sale and purchase of real property, landlord/tenant issues, short sales, and loan modifications in Tampa, Westchase, Odessa, Oldsmar, Palm Harbor, Clearwater, Pinellas Park, Largo, St. Petersburg, and throughout the greater Tampa Bay area.
