Category: Student Loan Refinancing

Want to pay off student loans fast?

If you want to get out of debt, you may be wondering whether there are smarter ways to pay off student loans. While your student loan debt may be hard to manage, the good news is you have options for student loan repayment.

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In this guide, you’ll learn five easy strategies to pay off student loans fast:

• Make an extra student loan payments
• Refinance your student loans
• Apply for student loan forgiveness
• Get student loan benefits at work
• Make a lump-sum student loan payment

1. Make an extra student loan payment

One of the best strategies to pay off student loans fast is to make an extra student loan payment. Since there are no prepayment penalties, you can either pay more than the minimum payment each month or make as many extra payments each year as possible.

For example, if your monthly minimum payment is $400 per month, and you have more discretionary income, consider paying $500 per month. Similarly, in addition to making 12 monthly payments per year, consider an extra payment of any amount once every three months for a total of 16 payments per year.

Contact your lender and explain that you want to make higher monthly payments and/or additional payments several times per year. Your lender should be willing to accommodate this request. Be sure to specify that you want to apply any extra payment above the minimum payment to principal only (not to next month’s monthly payment) to limit the amount of interest that accrues.

2. Refinance your student loans

Student loan refinancing is often the single best strategy to lower your student loan interest rate. Student loan refinancing allows you to pay off your existing student loan and assume a new student loan with a lower interest rate.

There are multiple private student loan lenders who offer interest rates as low as 2% to 3%, which is substantially lower than government loans and in-school private loan interest rates. You can choose both fixed and variable rates (and with some lenders, hybrid loans with both a fixed and variable feature) and loan terms ranging from 5 to 20 years.

Each lender has its own eligibility requirements and underwriting criteria, which may include minimum income, a minimum credit score and free cash flow. To maximize your chances of being approved, you should apply to multiple lenders and consider using a co-signer.

3. Apply for student loan forgiveness

If you are a teacher or public servant, or considering a career as a teacher or public servant, there are student loan forgiveness programs that will forgive a portion, or all, of your student loans. The federal government created these programs to encourage promising individuals to give back to their communities.

Teacher Student Loan Forgiveness is for full-time teachers with five years of teaching experience in a designated elementary or secondary school or educational service agency that serves students from low income families. Teachers with federal direct loans or Stafford Loans are eligible to have up to $5,000 forgiven and up to $17,500 forgiven for elementary and secondary special education teachers and secondary math and science teachers.

Public Service Loan Forgiveness is for student loan borrowers with direct student loans or consolidated student loans who are employed full-time in an eligible state, local or federal public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments. Public servants who qualify for this type of student loan forgiveness can have 100% of their student loans forgiven.

You can also check with your student loan servicer to more about options for student loan relief. For example, if you have federal student loans, you could explore student loan forgiveness with Aidvantage, MOHELA, EdFinancial or your student loan servicer.

4. Get student loan benefits at work

Speak with your human resources department to learn if your company offers student loan repayment benefits. If not, now may be the time to make your pitch for a new employee perk. According to a American Student Assistance survey, 76% of respondents said that if a prospective employer offered a student loan repayment benefit, it would be a deciding or contributing factor for the respondent to accept the job.

Companies such as Fidelity, PwC, Penguin Random House, Aetna and others are now offering their employees student loan repayment benefits in addition to 401(k) and health insurance benefits. According to the Society of Human Resource Management, 4% of companies are currently offering a student loan repayment benefit. Each company has its own eligibility criteria, but typically you need to be employed for a certain amount of time and make regular monthly student loan payments.

For example, Fidelity employees at the manager level and below are eligible to receive up to $2,000 per year up to $10,000 toward their student loans. PwC pays up to $1,200 per year for six years toward an employee’s student loan debt. Last month, Penguin Random House announced it will pay $1,200 per year up to $9,000 in student loan repayment benefits. Aetna offers up to $2,000 in matching student loan payments so long as an employee earned a degree within three years of applying for the benefit.

The student loan repayment benefit is considered income so the employee is responsible for the associated taxes.

5. Make a lump-sum student loan payment

You can make a lump-sum student loan payment to reduce your principal student loan balance. This lump-sum student loan calculator shows you how much you can save when you make a one-time, lump-sum student loan payment.

How can you make a lump-sum student loan payment? You could save up the funds, or alternatively, use money from a bonus, tax refund or raise. If you can pay your housing, transportation, student loans, necessities and other personal expenses with your base salary, then you are in a solid position to apply any additional cash windfall that comes throughout the year toward student loan debt payment.

Your first inclination might be to spend your tax refund, bonus or raise on a vacation or other personal purchase. However, the wiser move is to apply any extra money toward paydown of principal on your student loans. Not only will you save on additional interest expense, but you can also make a meaningful impact to reduce your outstanding loan balance. This strategy of using a lump-sum payment will help you accelerate your path to financial freedom.

Other Resources: Pay Off Student Loans

Mentor can help you learn more about these various options:

• Student Loan Refinancing
• Federal Student Loan Consolidation
• Income-Driven Repayment Plans
• Student Loan Forgiveness

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You’re ready to refinance your student loans. You’ve done your homework. You’re well informed. You’ve got this. Here is one more list to make sure you have everything on your list before you choose your student loan company and your student loan.

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1. Interest Rates Savings

Compare the interest rates and loan terms of your current student loan with your new interest rate from student loan refinancing.

Calculate your savings from student loan refinancing with the Mentor Student Loan Refinancing Calculator.

2. Fixed vs Variable Interest Rates

If you are switching from a fixed interest rate to a variable interest rate, your variable interest rate could rise in the future and change your monthly student loan payments for the better (lower interest rates) or the worse (higher interest rates).

3. Borrower Reward Benefits

Look for borrower reward benefit programs, as these can help reduce the total cost of your loan.

4. Repayment Terms

While extending the repayment term may lower your monthly student loan payment, you may end up paying more interest over the life of your refinance loan.

5. Hidden Fees

Understand if there are any upfront, origination, prepayment or other fees, as they could add to the total cost of your loan.

6. Co-Signer

Determine if your student loan company permits co-signers.

7. Co-Signer Release

Determine if your student loan company permits a co-signer release option.

8. Reputation

Ensure the lender and servicer are reputable and financially strong. The servicer is the organization you will be making payments to and interacting with over the life of your student loan.

9. Refinancing vs Consolidating

Understand and evaluate the various features and benefits of your current student loans, and any potential benefits that may be lost by refinancing federal and private education loans, such as the loss of any remaining grace periods.

10. Student Loan Review

Read our Reviews to choose the best student loan company for you.

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Now that you have made the decision to refinance your student loans, it is time to understand the student loan refinance process. Over the past five years, the process to refinance student loans has been simplified considerably. Gone are the days of piles of paperwork, long wait times, and bureaucracy.

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So, what does the student loan refinance process look like? Here are 6 steps to make the student loan refinance process seamless for you:

1. Student Loan Refinance Process: Easy Application

• All the student loan refinance applications are online and you receive a student loan interest rate offer typically within 2 minutes
• The total student loan refinance application may take less than 15 minutes to complete
• Co-signers and parents can also apply online as well

2. Select Your Loan

• You can choose a fixed or variable student loan interest rate
• You can choose your loan term and decide how fast you want to pay off your student loan

3. Submit Your Loan Documentation

• You can submit your documentation online
• Some lenders will allow you to take a photo of your documents, or even submit via text
• Key documents include your:

– Driver’s license or passport (or government issued ID)
– Transcripts / Diploma to verify your degree
– Payoff statement from your current lender (if refinancing)
– Monthly rent amount or mortgage payments
– Two most recent pay stubs or tax returns (or offer letter of employment)

4. Lender Underwriting Review

• The lender will review your submitted documents and credit report
• The lender will apply its proprietary credit model to ensure that you meet all its underwriting criteria

You’re Approved!

5. Review Disclosures & Sign Loan Documentation

• Review truth in lending and other disclosure statements
• Sign your student loan documentation

6. Your Student Loan Is Disbursed

• If you refinance your student loans, your lender will issue you a new student loan and directly pay off your existing student loan from your existing lender
• If you borrow a new student loan, your lender will send the funds directly to your school

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When you refinance student loans, here are the Top 10 ‘must haves’ you should look for:

1. Lower interest rate
2. Flexible loan terms
3. Significant savings compared to existing student loans
4. Fixed and variable interest rates
5. Dedicated and available customer service
6. Ability to refinance federal and private student loans
7. Online application
8. Forbearance options in case of economic hardship
9. Autopay discount
10. Other benefits

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What are the reasons for student loan refinancing rejection?

Don’t worry. If you have faced student loan refinancing rejection, you are not alone.

The good news is that you can overcome these student loan denial reasons with these 7 secrets.

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How To Rebound From Student Loan Refinancing Rejection?

Refinancing your student loans comes with many benefits: a lower interest rate, a lower monthly payment, one combined loan and the opportunity to pay off your student loans faster.

That means that over the life of your student loans, you potentially could save up to tens of thousands of dollars.

So, you check your new interest rate, prepare your application, assemble your documents and wait for a response.

But, then student loan refinancing rejection strikes and the dream of all those savings quickly fades.

What do you do next?

You Mentor.

Step 1: Diagnose the problem

Student loan refinancing is an excellent tool to help lessen the financial burden of student loan repayment.

However, getting approved for student loan refinancing is not guaranteed and student loan refinancing rejection may be in the cards. Why?

While the federal government issues student loans, the federal government does not refinance student loans. Therefore, if you want to refinance student loans, you have to refinance only with a private lender.

Each private lender has its own eligibility criteria, underwriting requirements and approval processes. If one lender denies your application and you face student loan refinancing rejection, the good news is that you can still apply to another lender – or reapply to the same lender – to obtain approval.

If your application is denied, the lender has to provide a reason for the denial. Some common reasons for denial include:

Insufficient Income: If you are unemployed or have low income, lenders may question your ability to meet your monthly life expenses, including debt obligations such as student loan payments.

High Debt/Income Ratio: This ratio is expressed as a percentage, and measures the amount of your monthly debt payments as a percentage of your monthly income.

Lenders understand that you may have other debt obligations such as a mortgage, but they want to make sure you can pay your student loan debt, other debt and life expenses.

Lack of Work Experience: Many lenders want to ensure that you have stable employment, or at least a written job offer.

This means that it can be difficult to refinance your student loans while you are unemployed, a student or a recent college graduate without sufficient work experience.

However, some lenders will refinance student loans for medical residents or third year law school students with a written job offer, for example.

Low Credit Score: Lenders want you to demonstrate a history of financial responsibility. Your credit score is one way to measure your financial health. If your credit score is too low, you may be ineligible to refinance student loans. Most lenders require a minimum credit score in the mid 600’s.

Step 2: Apply To Other Lenders

A rejection from one lender does not preclude you from receiving approval from another lender.

Remember that each lender has its own eligibility and underwriting criteria.

Therefore, you should apply to multiple lenders to increase your chances for approval and to find the lowest rate on your student loans.

A student loan refinancing application takes only two minutes to receive your new interest rate.

If you apply to multiple lenders within 30 days, typically this is treated as a single inquiry on your credit report.

Step 3: Get A Qualified Co-Signer

Ask your spouse, parent, grandparent or someone else close to you to act as a co-signer for your student loans. Your co-signer needs to have a strong credit profile and income, and be willing to be equally responsible with you for your student loan.

Having a qualified co-signer can make the difference between “approved” and “denied”

The good news for your co-signer is that after you are approved to refinance your student loans, many student loan lenders offer a co-signer release, which releases your co-signer of financial responsibility if the co-signer and you can meet certain qualifications.

Step 4: Check Your Credit Report

Lenders review your credit report and credit score to measure your financial responsibility.

First, you need to understand the components of your credit report, including your outstanding debt obligations, credit utilization, history of payments and other metrics. Second, make sure that you have reviewed your credit report for any errors.

If there are any errors, you should dispute them.

You can obtain a free copy of your credit report from all three bureaus (Equifax, Experian and Transunion) through AnnualCreditReport.com

Step 5: Consolidate Debt

If you have outstanding debt, you should consolidate your debt into a lower interest rate loan.

For example, if you have outstanding credit card debt, you should consider debt consolidation with a personal loan to lower your interest rate. You may be able to cut your current interest rate in half with a personal loan.

Step 6: Pay Off Debt

Lenders will evaluate your current debt-to-income ratio. One way to improve this ratio is to lower your debt burden.

Your debt-to-income ratio is driven by two factors: debt and income.

If you lower your debt or increase your income (or preferably both), you will improve your debt-to-income ratio.

Use a monthly budget to cut expenses and manage your finances. Use the cost savings to make extra debt payments to reduce principal.

If you want to pay off debt and reduce principal, avoid income repayment plans, which can increase your interest payments over time.

Your goal is to reduce your loan principal so that your monthly payments decrease.

Step 7: Increase Your Income

The second way to improve your debt-to-income ratio is to increase your income.

Ask for a raise.

Find a higher paying job.

Develop a side hustle with recurring monthly income.

Higher income provides comfort to lenders that you will be able to repay your student loan debt in full and on time.

It may take some work – and time – to improve your financial profile and boost your credit score.

However, the investment will be worth the effort to reap the benefits of student loan refinancing.

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This is not an April Fool’s joke.

If you are counting on Public Service Student Loan Forgiveness – the federal program that forgives your student loan debt after 10 years of qualifying work in public service and 120 consecutive student loan payments – then pay close attention.

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Is Your Student Loan Forgiveness Invalid?

As first reported by the New York Times, a student loan borrower’s acceptance into a federal student loan forgiveness program may not be binding and could be rescinded by the U.S. Department of Education.

In a legal filing March 23, the Education Department said that student loan borrowers could not rely on the approval letters sent by the program’s administrator, FedLoan Servicing, because any approvals are considered tentative.

Four student loan borrowers (and the American Bar Association) sued the Education Department to seek reinstatement of their eligibility for the Public Service Loan Forgiveness Program. The plaintiffs claim they initially qualified for Public Service Loan Forgiveness, only to have the decision subsequently reversed.

“The [U.S. Department of Education]’s response is illogical, untenable and bewildering,” Linda Klein, president of the American Bar Association, told the  New York Times. “[An unreliable certification system] exposes those undertaking public service work – exactly what Congress intended them to do – to crippling financial risk.”

So, you now work in public service – or plan to work in public service. What does this all mean and what should you do?

Here is what you need to know about public service student loan forgiveness:

1. Understand How Public Service Student Loan Forgiveness Works

The Public Service Loan Forgiveness Program is a federal program that forgives federal student loans for borrowers who are employed full-time (more than 30 hours per week) in an eligible federal, state or local public service job or 501(c)(3) non-profit job who make 120 eligible on-time payments.

There are only two types of federal student loans that qualify: Direct Loans (such as Stafford Loans) and a Federal Direct Consolidation Loan. Therefore, private student loans are not eligible.

Today, more than 550,000 have signed up for Public Service Student Loan Forgiveness.

It is important to note, however, that no student loans have been forgiven yet under this program, which began in 2007 and requires 10 years of employment in public service.

The U.S. Department of Education has not released the application for Public Service Loan Forgiveness, although it is expected to be available before October 2018 (the date when the first borrowers become eligible, since this date is 10 years after the start of the program).

In order to be eligible for Public Service Loan Forgiveness, you have to make the majority of the 120 student loan repayments under an income-driven repayment plan.

2. This Is An Individual Lawsuit With Specific Circumstances

You don’t need to panic that suddenly your years of hard work in public service will not result in student loan forgiveness. This lawsuit involves individual litigants with specific, unique cases.

Therefore, their circumstances may not apply to you.

3. Choose Your Employer And Type of Employment Carefully

The Consumer Financial Protection Bureau estimates that 25% of the U.S. workforce is employed in public service, and many of those employees may be eligible for some form of student loan forgiveness, including Public Service Loan Forgiveness.

For example, one of the litigants in the case worked at a non-profit organization.

While the Public Service Student Loan Forgiveness program includes employment at a 501(c)(3) non-profit organization, not every non-profit or type of employment qualifies.

Keep that in mind when considering Public Service Loan Forgiveness, your employer and position. If you are unsure whether an employer or role would qualify for Public Service Loan Forgiveness, then you may want to look at alternative options that you know would qualify.

Of course, this begs the question that how do you know if your employer qualifies if you are allegedly told it does and later find out it does not? In this circumstance, there is no bright line rule.

This lawsuit may provide some insight. The Education Department also may provide more clarification as the program starts to forgive student loans.

4. Public Service Student Loan Forgiveness Should Not Be Your Primary Reason For Entering Public Service

If your calling is to work in public service, thank you for your commitment to serve our country and for your sacrifice.

However, entering a public service career to have your student loans forgiven after 10 years should not be the driving force for your decision.

Over the course of 10 years, the program’s rules may change and it is possible that the program looks different than when you started your public service career.

It is also possible the program does not exist in its current form, or at all.

5. The Trump Administration May Change Student Loan Repayment

Last October, then-candidate Donald Trump proposed an income-based repayment plan that would allow student loans borrowers to cap their monthly student loan payments based on their income and then have their student loans forgiven after a certain period of time.

Currently, under the Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE) income-driven repayment plans, you pay 10% of your discretionary income each month toward your federal undergraduate student loans for 20 years, at which point any remaining balance on your federal undergraduate student loan is forgiven.

Under REPAYE, if you have graduate school student loan debt, the repayment period is 25 years before your remaining student loan debt is forgiven.

During the presidential campaign, Trump said he would combine the existing repayment plans into a single plan to make it less confusing for borrowers.

While Trump’s proposal raises the monthly payment cap from 10% to 12.5% of income, his proposal forgives the remaining student loan balance five to 10 years sooner than the current income-driven repayment plans.

How does Public Service Loan Forgiveness program fit within this framework?

While the Trump administration has not enacted these proposals, the future of the Public Service Loan Forgiveness program is less clear.

The program could be continued, modified, eliminated or folded in to a new repayment plan program.

If Congress were to eliminate Public Service Loan Forgiveness (and place all borrowers into a single income-based repayment program), for example, existing borrowers likely would be grandfathered in, since they borrowed with the expectation of entering public service and qualifying for loan forgiveness.

Public Service Loan Forgiveness alternatively could be restricted by capping the amount of loan forgiveness, restricting the eligible fields or establishing a means test for forgiveness.

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Will student loan borrowers in student loan default have to pay higher student loan default fees?

Last week, the Trump administration issued its first policy on student loans.

As a result, loan guarantee agencies that collect on defaulted debt can charge borrowers who have defaulted on their federal student loans fees up to 16% on their student loan balances – even when these borrowers promise to make good on their student loans within 60 days.

The action comes days after a Consumer Federation of America report showed that 1.1 million borrowers defaulted on their federal student loans last year.

Here is what you need to know, whether it impacts you and what you can do about it.

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What Happened

In a two-page “Dear Colleague” letter, the U.S. Department of Education asked guarantee agencies to disregard a July 2015 memorandum issued by the Obama administration that forbid the agencies from charging up to 16% of the principal and interest accrued on student loans if the borrower entered the government’s student loan rehabilitation within 60 days of default.

Sen. Elizabeth Warren (D-MA) and Rep. Suzanne Bonamici (D-OR) sent a letter to Secretary of Education Betsy DeVos urging the Education Department to uphold the Obama administration’s guidance on collection fees, which they said resulted in an “unnecessary financial burden.”

“Congress gave borrowers in default on their federal student loans the one-time opportunity to rehabilitate their loans out of default and re-enter repayment,” Warren and Bonamici wrote. “It is inconsistent with the goal of rehabilitation to return borrowers to repayment with such large fees added.”

The Obama memorandum pertained to federal loans issued by banks prior to 2010, known as the Federal Family Education Loan (FFEL) Program. Since 2010, all federal student loans have been issued only by the federal government.

The memorandum was issued after the 7th circuit court of appeals asked the U.S. Department of Education for guidance in a lawsuit against United Student Aid Funds (USA Funds), which challenged the assessment of collection costs. Bryana Bible, a student loan borrower, sued USA Funds after being charged $4,547 in collection costs on a loan on which she defaulted in 2012. Although Bible signed a rehabilitation agreement with USA Funds to set a reduced payment schedule, USA Funds charged her the fees.

The U.S. Department of Education sided with Bible in an amicus brief, which led USA Funds to sue the Education Department in 2015. USA Funds paid $23 million to settle a class action lawsuit related to the Bible case without admitting any wrongdoing.

What Prompted This Decision: Higher Student Loan Defaults Fees

The Trump administration rolled back its predecessor’s position on the grounds that there should have been public input on the issue.

However, Warren questioned whether Taylor Hansen, a former for-profit college lobbyist who worked at the Education Department, played any role in the decision.

Hansen’s father, Bill Hansen, served as Deputy Secretary of Education under President George W. Bush and runs USA Funds, which has been involved in a multi-year lawsuit with the Education Department.

The Education Department said that the younger Hansen resigned Friday and did not have any conflicts of interest. Prior to 2015, USA Funds earned approximately $15 million per year from these fees.

As reported by Bloomberg, according to the National Council of Higher Education Resources, the Education Department had never flagged the fee as inappropriate in any of the more than 135 audits or reviews it conducted of companies such as United Student Aid Funds since 1992.

From the viewpoint of the National Council of Higher Education Resources, DeVos is simply “righting a wrong” by reversing Obama’s directive.

Direct Loans Not Impacted

If you have student loans from the U.S. Department of Education – such as a federal Direct Loan such as a Stafford Loan – you are not impacted by this action.

What You Can Do About This: Student Loan Hack

Your best option is to consolidate your student loans.

Under the new rule, if you have a FFEL loan, you essentially no longer have a 60-day period for protection from these fees.

However, when you consolidate your FFEL student loans into a Direct Consolidation Loan, you can be protected by the 60-day grace period.

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Have you heard about the Navient student loan lawsuit?

Here is a question for you to ponder: does your student loan servicer owe you a fiduciary duty or are they just there to collect your student loan payments?

Well, the answer may surprise you depend on who you ask.

If you read Navient President & CEO Jack Remondi’s Medium blog, he will tell you that “At Navient, our priority is to help each of our 12 million customers successfully manage their loans in a way that works for their individual circumstances.”

If you read Navient’s latest court filing in the ongoing CFPB student loan lawsuit, however, you’ll learn a more striking reality:

According to court documents filed by Navient, “There is no expectation that the servicer will ‘act in the interest of the consumer.’”

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Here is what you need to know and how it will impact your student loans:

The Navient Student Loan Lawsuit

If you have a student loan, there is a good chance that it may be serviced by Navient.

Navient, which spun off from Sallie Mae and is the nation’s largest student loan servicer, has more than 12 million customers and services more than $300 billion of government and private student loans.

In a student loan lawsuit filed against Navient in a Pennsylvania federal court in January, the Consumer Financial Protection Bureau (CFPB) alleged that, among other allegations, Navient “systematically and illegally [failed] borrowers at every stage of repayment,” including:

• created obstacles to repayment by providing bad information;
• processed payments incorrectly;
• failed to act when borrowers complained;
• illegally cheated many struggling borrowers out of their rights to lower payments, which caused them to overpay for their student loans;
• deceived private student loan borrowers about requirements to release their co-signer from the loan; and
• harmed the credit of disabled borrowers, including severely injured veterans

The CFPB also alleged that Navient improperly directed borrowers into forbearance when these borrowers otherwise might have qualified for income-driven repayment plans, and did not adequately keep borrowers in income-driven plans informed of deadlines to maintain their eligibility under such plans.

Navient’s Response

In a statement, Navient denied all allegations and said the student loan lawsuit was politically motivated.

According to Navient’s motion to dismiss filed on March 24, Navient operates pursuant to U.S. Department of Education contracts, which specify in detail how servicers are supposed to collect payments, communicate with borrowers and receive compensation for these activities.

Navient notes that there has been no violation of any of these established legal rules, regulations or contract requirements.

Navient notes that the CFPB has investigated Navient since 2013 and has not found any violations of actual servicing rules.

Does Your Student Loan Servicer Owe You A Fiduciary Duty?

This may come as a surprise to some student loan borrowers, but Navient says it is not a fiduciary financial advisor.

According to Navient, Navient’s relationship with borrowers is that of an arm’s-length student loan servicer.

Navient says its role is to collect payment owed by borrowers – and in this role, “the servicer acts in the lender’s interest,” and there is “no expectation that the servicer will ‘act in the interest of the consumer.’”

Navient added that courts “routinely hold that servicers and lenders ‘do not owe borrowers any specific fiduciary duties based upon their servicer/borrower relationship.’”

What If You Need Help Choosing The Best Student Loan Repayment Plan?

You may reach a different conclusion depending whether you read Navient’s court filing or its CEO’s public blog posts.

Navient’s motion to dismiss:

“Borrowers could not reasonably rely on Navient to counsel them into alternative payment plans unless Navient had an affirmative duty to provide such individualized financial counseling. But the law imposes no general duty to provide information without some fiduciary relationship.”

Navient further notes in its response to the CFPB student loan lawsuit that the U.S. Department of Education does not pay Navient enough to provide sufficient customer service that the CFPB would like Navient to provide.

President & CEO Jack Remondi’s blog posts:

In Remondi’s February 12 Medium blog post, he offered four ideas for a better student loan program. His fourth idea is to encourage borrowers to engage more with their student loan servicers.

Similarly, if you read Remondi’s May 2016 blog post, he wrote, “At Navient, we make it a priority to educate our federal borrowers about income-driven options…These programs are our primary tool in helping borrowers avoid default. As a result, we are a leader enrolling borrowers in these programs.”

If Navient does not owe you a financial responsibility, you may want to think twice about asking your student loan servicer for financial advice.

Your Next Action Steps

Given Navient’s response to the lawsuit, what are your next action steps?

1. Understand all your student loan options

If Navient says it may not act in your best interest, then it is time for you to get empowered. Don’t rely on your student loan servicer to have all the answers. Do your homework and understand your options:

• Student Loan Refinancing
• Federal Student Loan Consolidation
• Income-Driven Repayment Plans
• Student Loan Forgiveness

2. Prepare for any potential changes to your student loans in the Trump administration

There may be several changes to your student loans in the Trump administration, including student loan forgiveness and fees for student borrowers in default, among others.

Become familiar with the latest student loan views from President Trump and U.S. Secretary of Education Betsy DeVos.

3. Contact the Consumer Financial Protection Bureau

If you want to file a formal complaint regarding your student loan lender or student loan servicer, contact the Consumer Financial Protection Bureau.

The CFPB supervises financial services companies and enforces federal consumer financial laws.

Once you submit a complaint to the CFPB, the CFPB will forward your complaint to the student loan company or servicer, which will have 15 days to respond regarding your complaint and the proposed steps that will be taken to resolve your complaint. Once you receive the company’s response, you have 60 days to provide feedback.

4. Look beyond your student loan servicer for help with your student loans

It may seem counter-intuitive if you cannot rely on your student loan servicer to act in your best financial interest.

You need an action plan that is tailored for your specific financial life circumstance.

Your financial situation is unique, and therefore you need to find the option that is in your best interest.

Don’t let your student loan servicer steer you toward a short-term option when you should choose the long-term solution. Knowledge is power when it comes to your personal finances.

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If you want to save money on your student loans, try these 4 student loan tax tricks.

There is a light at the end of the student loan repayment tunnel. And it comes at an unlikely time each year: tax season.

Are you maximizing each and every tax benefit on your student loans for college and graduate school? If not, you’re not alone. The tax laws can be complicated, and it can be daunting to differentiate between a tax credit and tax deduction.

So, let’s make it easy for you.

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If you are paying student loans for your (or your child’s) education, here are four student loan tax credits and deductions that you potentially can take advantage of this tax season:

Student Loan Tax Trick #1: Student Loan Interest Deduction

This is the most classic student loan tax trick.

With the Student Loan Interest Deduction, you can deduct up to $2,500 each year of student loan interest that you paid on a qualified student loan so long as you are enrolled at least half-time and are working toward a degree.

A qualified loan means that you borrowed your student loan solely to pay for education expenses and did not borrow the student loan from a relative or through a qualified employer plan. Examples of qualified education expenses include tuition and fees, room and board, books, supplies, equipment and transportation, among other necessary expenses.

You can only the deduct the lesser of $2,500 and the actual amount of interest that you paid, including any additional, voluntary student loan payments.

For example, if you paid $10,000 of student loan interest this tax year, then you only can deduct $2,500 from your taxable income. Since the student loan interest deduction is an “above the line,” deduction, you do not need to itemize your deductions.

To qualify for this student loan tax deduction, you must have a modified adjusted gross income of $80,000 or less ($160,000 if married filing jointly).

To find out how much student loan interest you paid over the past year, you should review your Form 1098-E from your student loan lender.

As long as your paid more than $600 in student loan interest, you should receive Form 1098-E. If you paid less than $600 in student loan interest, you can still qualify for the student loan interest deduction.

Student Loan Tax Trick #2: The American Opportunity Credit

The American Opportunity Credit is a tax credit that allows you (or a person paying for your education) to claim up to $2,500 per year for the first four years of school as you work toward a degree with at least half-time enrollment.

You can apply the tax credit to the costs of college, including tuition and related expenses that are required for enrollment (such as books, supplies and equipment).

This tax credits covers 100% of your qualified education expenses up to $2,000, and then 25% of the next $2,000 of qualified education expenses up to $2,500 total.

To qualify for this tax credit, you must have a modified adjusted gross income of $90,000 or less ($180,000 if married filing jointly). Up to 40% of the tax credit may be refundable.

Student Loan Tax Trick #3: The Lifetime Learning Credit

The Lifetime Learning Credit is a tax credit that allows you to claim up to $2,000 per year for any college tuition, fees, books, supplies and equipment that were required for your course.

There is no limit on the number of years that you can claim the Lifetime Learning Credit. To qualify for this tax credit, you must have a modified adjusted gross income of $65,000 or less ($131,000 if married filing jointly).

This tax credit is a non-refundable tax credit, which means that the tax credit is limited to the amount of your total income tax owed. Therefore, if the tax credit is more than your income tax owed, you will not receive the excess amount as a refund.

Student Loan Tax Trick #4: Tuition and Fees Deduction

The Tuition and Fees Deduction, which expired in 2016, enabled you to reduce the amount of your income that was subject to income tax by up to $4,000. The deduction could be utilized for you, your spouse or a dependent for your tuition and fees (but not your room and board).

To qualify for this tax deduction, you had to have a modified adjusted gross income of $80,000 or less ($160,000 if married filing jointly).

What’s the difference between a tax credit and a tax deduction?

A tax credit reduces the amount of income tax that you have to pay. A tax deduction reduces the amount of your income that is subject to income tax.

Does a tax credit or tax deduction save me more money?

A tax credit saves you more money than a tax deduction.

Why?

A tax credit is a dollar-for-dollar reduction of the income taxes that you owe. For example, a $2,000 tax credit means that you save $2,000 in taxes.

A tax deduction saves you the amount of the deduction multiplied by your marginal tax rate. For example, if you are in the 30% tax bracket and qualify for a $1,000 tax deduction, your savings are $300 ($1,000 multiplied by 30%).

Can you claim both the American Opportunity Credit and the Lifetime Learning Credit?

Unfortunately, even if you are eligible, you cannot claim both the American Opportunity Credit and the Lifetime Learning Credit on your income tax return in the same tax year. You should claim the tax credit that maximizes your savings based on your specific, financial situation.

Can you claim an education tax credit if you also claim an education tax deduction in the same tax year?

Yes. If you claim an education tax credit, you can claim the Student Loan Interest Deduction.

Can you still qualify for the Student Loan Interest Deduction if you are on an Income-Based Repayment (IBR) plan or Income-Contingent Repayment (ICR) plan?

Yes. The IRS allows you to deduct student loan interest regardless of your student loan repayment plan.

Which IRS tax forms do you use to take advantage of these student loan tax credits and student loan tax deductions?

You can use IRS Form 8863 and Form 1040, and speak to a tax professional for more details.

Is it better to pay off your student loans faster or should you make sure to at least qualify for these student loan tax deductions and student loan tax credits?

You always should strive to pay off your student loans faster. That means making extra payments to reduce the principal amount of your student loans, which will save you money on interest costs.

Tax deductions and tax credits are helpful, but you should never make a financial decision solely for tax reasons.

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