Category: Student Loan Refinancing

Top 15 Student Loan Refinance Questions

Is student loan refinancing right for me” may be one of the many student loan consolidation questions on your mind.

Lower rates. Lower monthly payments. Pay off student loans faster.

For many, refinancing student loans can be a prudent strategy to save money on student loans and lower your monthly payment.

Plus, the student loan refinance process can be done online and in less than 15 minutes.

Let’s jump right in with the top student loan consolidation questions when you refinance student loans.

1. Am I Good Candidate To Refinance My Student Loans?

When you first borrowed your student loans, you may have had both a federal student loan and a private student loan. Your federal student loan is likely at the same high rate as everyone else’s federal student loan, since the federal government offers the same fixed rate to all borrowers. If you have a private student loan, it likely is a variable rate loan with a high interest rate. This is because when you borrowed that loan, you were in school and you may have had a limited credit history, which meant that your student loan company deemed you a higher credit risk.

Now, you may have graduated, become employed, and developed a stronger credit history. As a result, you may be able to qualify to consolidate and refinance your existing federal student loans and private student loans into a new private loan with a lower interest rate.

If your goal is to obtain a lower interest rate, lower your monthly payments, switch from a variable interest rate to a fixed interest rate (or vice versa), or change the loan term to a longer to shorter number of years to repay your loan, then you may be a good candidate to refinance student loans.

The federal government, through the U.S. Department of Education, does not refinance student loans. However, you can refinance both federal student loans and private student loans with several private student loan companies.

2. Should I Choose A Fixed Interest Rate Loan Or A Variable Interest Rate Loan?

It is really a personal choice and should be considered along with your finances, loan amount and loan term.

If you like the predictability of paying the same amount each month and don’t want to worry about your monthly payments potentially changing each month, then a fixed rate loan is probably best for you. Plus, if you plan to pay off your loan over a longer time period (e.g., 10-20 years), then you may prefer to lock in your interest rate now and not be impacted by changes in interest rates in the broader market.

Variable interest rate loans are typically priced lower than fixed rate loans and can offer more savings initially. If you plan to pay off your loans over a shorter time period (e.g., 10 years or less), then you may prefer to choose a variable rate loan. However, if interest rates rise, then you should be prepared to make higher monthly payments and pay higher total interest over the life of the loan.

3. Do I Have To Pay An Origination Fee?

By the way, what is an origination fee? An origination fee is a charge upfront from the student loan company to process an application for a new loan.

Most student loan companies do not charge an origination fee to refinance your loan. Why? Well, it is hard to justify charging a customer for an origination fee when you already have an existing student loan and are just refinancing the student loan to a lower interest rate.

Some student loan companies do charge an upfront origination fee on “in school” loans (typically 2% or less), which are loans that one borrows while one is a student.

4. Can I combine my federal student loans and private student loans when I refinance student loans?

Yes, you can combine federal and private student loans with certain student loan companies when you refinance student loans. You also may be able to refinance student loans that you previously consolidated with the federal government through the U.S. Department of Education (e.g., Direct or FFEL) or a private student loan company.

Double check with your lender when you refinance your student loans to make sure. Also, when you refinance your federal student loans, you lose most flexible student loan repayment plans and other protections connected with a federal student loan. That said, some student loan companies offer flexible student loan repayment plans, including deferment forbearance.

Again, you should check with your new prospective student loan company and be sure to ask the new student loan company the differences between your new, refinanced student loan and your existing federal student loan.

5. Will I Need A Co-Signer For My Student Loans?

If you have a limited credit history, you may need another creditworthy person (e.g., a parent, spouse, relative or friend supportive of your educational goals) to help you qualify for a loan. A creditworthy cosigner is one who has strong credit and an ability to repay the loan.

The benefit of a co-signer is that a lender considers the income and credit history of both you and the co-signer, which improves your chances of being approved for a student loan. A co-signer is equally responsible with you for the loan obligation.

Some lenders offer a co-signer release, which means that a co-signer can be “released” from your student loan and would no longer have an obligation to pay your student loan.

6. Is my school or degree eligible for student loan refinance?

Be sure to check the student loan company’s website or call the student loan company’s customer service team to check school and degree (and other) eligibility requirements. For example, many private lenders lend to student loan borrowers from accredited Title IV university and graduate programs. Title IV schools are higher educational institutions eligible to offer federal student loans to its students under Title IV of the Higher Education Act of 1965.

Each student loan company has different eligibility criteria to Student Loan Refinance, which may include being a U.S. citizen or permanent resident, your employment status, historical financial responsibility, and income and expenses, among other factors.

7. Can I get an autopay discount?

Yes! Most lenders offer up to 0.25% discount off your student loan interest rate if you sign up for auto pay. This means you receive an interest rate reduction of 0.25% on the total amount of your student loan so long as you authorize the loan servicer to automatically deduct monthly payments from your bank account. For example, if your interest rate on your new loan is 3%, you can lower your interest rate on your new loan to 2.75% (which is equal to 3.0% – 0.25% discount) for the life of the loan so long as you remain signed up with auto pay.

8. What will my monthly student loan payments look like?

Hopefully lower than what you are currently paying! You are in the driver seat – so you should consider a student loan that fits your personal and financial needs. Your monthly payment is primarily a feature of your interest rate, loan term and loan amount.

• Fixed Interest Rate. If you have a fixed interest rate, your monthly student loan payment will remain constant each month for the duration of your loan.
• Variable Interest Rate. If you have a variable student loan payment, your monthly loan payment may change each month based on the underlying benchmark such as 1 Month LIBOR.
• Shorter-Term Loan. If you have a shorter-term student loan (e.g., 10 years or less), your monthly payments may be higher than if you have a longer-term loan (more than 10 years) because you have a shorter period to pay off the loan.
• Longer-Term Loan. The longer the term of your loan (e.g., the number of years to pay back your loan), the more interest that will accrue over time and the more interest you will owe.

So, you should decide how much you can afford to pay now versus over time and find the loan product that works best for your personal and financial needs. And remember – most student loan companies offer up to 0.25% discount off your interest rate if you sign up for auto pay. The autopay savings can really add up.

9. How much time will I have to repay my student loan?

That’s entirely up to you. Most lenders offer a variety of terms for student loan repayment that range from 5 to 20 years. You will want to think about your financial situation today and if you want to have lower payments and spread out your student loan payments over a longer time period, or whether you want relatively higher loan payments each month so you can pay off your loan faster.

For example, with a fixed rate student loan, you will have higher monthly payments with a 10-year loan compared to a 20-year loan, but you will save 10 years’ worth of interest costs by paying your loan off in 10 years (rather than 20 years).

10. What is the maximum student loan amount that I can borrow?

Each lender’s maximum student loan amounts vary, but some student loan companies have no maximum limit.

11. After I refinance my student loans, what kind of customer service can I expect?

This should be one of your top questions. Since you will be tied to this student loan company for a long time (think 20 years if you have a 20-year loan), you need to make sure the student loan company is attentive, available and answers your questions promptly. Are they friendly when you call? Are they patient in answering questions? Are they accessible via phone, email and/or chat? Are they problem solvers? Do they want to make your life easier?

Overall, you should make sure you are comfortable with the student loan company’s customer service team.

12. After I refinance my student loan, what if the student loan company sells my student loan?

It happens – and a lot more than you think. You may refinance your student loan with a new lender, start getting comfortable with the new lender, and wham – you receive a letter in the mail stating that your student loan has been sold to a new student loan company. Suddenly, thoughts run through your head. Why me? Was something wrong with my student loan? Have I been tricked? Where are they sending me? Will this now change the terms of my student loan?

All reasonable questions. The short answer is…don’t worry.

It is very common for even the best student loan companies to originate a new student loan or refinance student loans only to sell that student loan to a third party down the road. Loan sales is one of the way that student loan companies make money and is a very common legal practice in the student loan industry. If your student loan is sold, you likely were not singled out. Rather, your student loan was likely sold with other student loans in a group sale transaction.

When a student loan sale is made, the terms of your student loan do not change based on the sale itself. Even if you have a new student loan company who purchased your student loan, that new student loan company is required to adhere to your existing student loan terms.

You should focus on whether the servicer of your student loan will change. The servicer is the company (which may be a third party or your original student loan company) that collects payments on a student loan, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a student loan holder.

In any event, if your student loan is sold, don’t worry. Contact your existing student loan company and new student loan company and have them walk you through the details. This is a normal occurrence within the private student loan sector and often times does not impact your student loan repayment experience.

13. What if I lose my job during the student loan repayment period?

It’s a scary thought. Here you are: you just took on this large student debt load (albeit at a lower interest rate) and then you unfortunately lose your job. Now, you need to figure out a way to deal with the monthly student loan repayment without any income coming in the door.

The good news is that most federal student loans and some private student loans are eligible for some form of relief – student loan repayment programs such as student loan deferment or student loan forbearance while you get back on your feet during a period of temporary financial hardship. For example, you may be able to decrease monthly payments or even suspend payments during a limited time period. However, interest may still accrue during this period, even if you are not required to pay it.

Some student loan companies will even help you find a job if you lose your existing one. You should check with your prospective student loan company to learn more about what happens if you lose your job and face a temporary financial hardship.

14. Are there any prepayment penalties if I want to pay off my student loan faster?

Most of the private student loan lenders now have no prepayment penalty. So if you can pay off your student loan faster than what is required, then way to go.

15. How long does it take for my student loan application to be approved and funded?

Most private student loan companies will provide you with a preliminary interest rate offer within 2 minutes. After you receive that offer, you can start uploading any financial documents that the lender requires (e.g., pay stubs or proof of income) and other documents like your diploma or proof of graduation. Typically, the approval and funding process can be completed within weeks and is based on how quickly you can provide the requested documents to complete your application.

Compare rates and pay off student loans faster

With student loan refinancing, you can combine existing federal and private student loans into a single student loan with a personalized lower interest rate and lower monthly payment.

Find a new student loan interest rate in only 2 minutes. Your credit score is not impacted when you view a new rate.These are our highest-rated Student Loan Refinance options for 2021.

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When applying to refinance student loans or borrow student loans, your lender may require a co-signer. If this happens to you, don’t worry. Many applicants need a co-signer to help get approved and get a lower interest rate. Here is everything you need to know about co-signers.

What is a cosigner?

If you have a limited credit history, you may need another creditworthy person (e.g., a parent, spouse, relative or friend supportive of your educational goals) to help you qualify for a loan. A creditworthy co-signer is someone who has strong credit and an ability to repay the student loan.

The benefit of a co-signer is that a lender considers the income and credit history of both you and the co-signer, which improves your chances of being approved for a student loan. A cosigner is equally responsible with you for the student loan obligation. You can learn more about which lenders offer cosigners and other benefits.

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What is a co-signer release?

Once you have been approved for to refinance student loans or get a new student loan, your cosigner may not want to be financially responsible for your student loan. In this case, some lenders will release the cosigner from his or her obligations to repay the student loan. This typically occurs after you have made a certain number of on-time monthly payments.

After the cosigner is released from the student loan, you will have sole financial responsibility for the student loan. Lenders will also want to assess your credit to ensure that you can repay the student loan on your own. You can learn more about which lenders offer cosigner releases and other benefits.

What are the requirements for a co-signer release?

While each lender has its own underwriting criteria, you will have to be able to demonstrate to y lender that once your co-signer is released that you can repay the student loan on your own. Here are some of the most common requirements:

• You must have graduated from college
• You must have made a certain minimum number of student loan repayments, including principal and interest (e.g., 12-36 monthly payments)
• You are employed and meet a certain minimum income threshold
• Your credit meets the underwriting standards of the lender

Benefits of co-signer release

Most of the benefits are for the co-signer who can be released.

• No further obligations to repay the student loan (sigh of relief)
• Credit score improvement
• Funds available to help co-sign other student loans (e.g., other college-bound children)

The borrower benefits as well. Yes, it can be a little scary to have sole responsibility for paying off student loans. But, it can be a confidence builder to know that you are financially responsible and have increased your independence.

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If you want to learn the top 5 reasons to refinance your student loans, then keep reading. Student loan refinancing is one of the best ways to save money and pay off student loans faster.

When you refinance student loans, you exchange your current federal student loans, private student loans or both for a new student loan with a lower interest rate. The new student loan is used to pay off your old student loans, and then you repay your new student loan each month. Student loan refinancing is one of the most effective ways to save money, lower your student loan payment and get out of debt more quickly.

In this guide, we discuss the top 5 reasons to refinance your student loans:

1. Get a lower interest rate
2. Lower your monthly payment
3. Simplify your student loan repayment
4. Change your loan terms
5. Change your student loan servicer

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1. Get a lower interest rate

The most common reason to refinance student loans is to get a lower interest rate. A lower interest rate means you can save money each month and pay off your student loans faster.

The reason you can get a lower interest rate is due to several factors. For example, every borrower receives the same fixed interest rate for federal student loans. This is because the federal government does not underwrite student loans, which means every borrower receives the same interest rate regardless of their credit score.

Since you’ve graduated, you have likely established a financial track record, became employed, generated income and improved your credit score. Lenders are willing to lower your interest rate because you are a mor established and less risky borrower.

This student loan refinancing calculator shows you how much you can save when you refinance student loans.

For example, let’s say you have $60,000 of student loans with a 8% interest rate and a 10-year repayment plan. Now, let’s assume you can refinance your student loans at a 3% interest rate an a 10-year repayment plan. Student loan refinancing would save you $117 each month and $14,074 total.

2. Lower your monthly payment

A second popular reason to refinance student loans is to get a lower monthly payment. If your current student loan payment is too high, student loan refinancing can help lower your payment so you can pay for living expenses and any other financial obligations. There are several ways to get a lower monthly payment.

First, a lower interest rate will lower your monthly payment, unless you change your repayment period. With a lower interest rate, you will save money each month and every month until you pay off your student loan.

Second, you can extend your repayment period, which will lower your monthly payment. A longer student loan repayment period means you pay less each month. However, it’s important to note that a longer student loan repayment period means more total interest because interest accrues even though you have a lower monthly payment.

3. Simplify your student loan repayment

Another benefit of student loan refinancing is the ability to simplify your student loan repayment.

When you refinance student loans, you combine your current federal student loans, private student loans or both into a single, new student loan. After you refinance, you will only make one monthly payment. That means you don’t have to manage multiple payment dates, student loan servicers or loan terms.

You also won’t have to make separate student loan payments for your federal student loans and private student loans. Therefore, student loan refinancing can significantly make it easier for you to pay off student loan debt. Remember to enroll in automatic payments so you’ll never miss or have a late payment.

4. Change your student loan terms

Student loan refinancing is an ideal opportunity to change your student loan terms. For example, if you have federal student loans, you have a fixed interest rate. This means that you pay the same fixed monthly payment, even if interest rates decrease. When you refinance student loans, you can choose a fixed interest rate or a variable interest rate, which gives you more flexibility for student loan repayment.

You can also change the length of your student loan repayment. For example, if you have federal student loans, the standard repayment term is 10 years. When you refinance student loans, you can choose a student loan repayment term from 5 to 20 years.

A shorter student loan repayment term (less than 10 years) means you would have a higher monthly payment, but you would save more money pay off your student loans faster. A longer student loan repayment period (more than 10 years) means you would have a lower monthly payment, but would pay more total interest since your student loan repayment term would be extended.

5. Change your student loan servicer

If you’re like many student loan borrowers, you may dislike your student loan servicer. Your student loan servicer is the company that collects and manages your student loan payments on behalf of your lender. When it comes to student loans, many borrowers want better customer service to answer questions, provide helpful information, and apply student loan payments correctly.

The good news is that when you refinance student loans, you receive a new student loan servicer. If you have multiple student loans, you may have several student loan servicers. Student loan refinancing will consolidate all your student loans into a single student loan with one servicer. With only one student loans, you can manage student loan repayment more easily.

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Before you make your next Navient student loan payment, you should be aware of this Navient lawsuit.

The Consumer Financial Protection Bureau (CFPB) filed a lawsuit against Navient, the largest student loan servicer in the country.

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, has more than 12 million customers and services more than $300 billion of government and private student loans.

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Here is what you need to know and the action that you can take on your next Navient student loan payment:

Navient Lawsuit: What Are The Allegations?

In its lawsuit and press release, the CFPB alleges 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 alleges 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.

“For years, Navient failed consumers who counted on the company to help give them a fair chance to pay back their student loans,” said CFPB Director Richard Cordray in a statement. “At every stage of repayment, Navient chose to shortcut and deceive consumers to save on operating costs. Too many borrowers paid more for their loans because Navient illegally cheated them and today’s action seeks to hold them accountable.”

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

What Is A Student Loan Servicer?

Think of a student loan servicer as providing both customer service and repayment support during the life of your student loan.

Student loan servicers play an intermediate role between a borrower and a lender. They process monthly student loan payments, manage borrower accounts and answer borrower questions.

If you borrow a student loan, your lender may not be the entity that manages your student loan after it is disbursed. While some companies act as both a lender and servicer, often times a separate company will service your loan.

A loan servicer will also work with you for free on student loan repayment plans and student loan consolidation.

It is possible – and more common today – that your lender (either the federal government or a private lender) transfers your student loan to one or more servicers while your loan is in repayment.

You don’t need to worry if you receive a notice that your student loan has been transferred to another servicer. It is not a reflection of you or student loan. If this happens, you should contact your new student loan servicer and update your bill pay information if you use autopay (which you should). Also, if your student loan is transferred to a new student loan servicer, there are no changes to your loan terms

Can I Choose My Student Loan Servicer?

No. Your student loan servicer is assigned to you. If you have a federal loan, the U.S. Department of Education will assign you a student loan servicer after your student loan is disbursed. Similarly, if you have a private student loan, your lender will assign a student loan servicer.

Is Navient My Student Loan Servicer?

You can contact your lender to determine your student loan servicer. If you have a federal student loan, you can also find your student loan servicer on the Federal Student Aid website.

Here is a list of the top student loan servicers:

• FedLoan Servicing (1-800-699-2908)
• Great Lakes (1-800-236-4300)
• Navient (1-800-722-1300)
• Nelnet (1-888-486-4722)
• Cornerstone (1-800-663-1662)
• Granite State (1-888-556-0022)
• HESC/Edfinancial (1-855-337-6884)
• MOHELA (1-888-866-4352)
• OSLA Servicing (1-866-264-9762)

What If Navient Is Your Student Loan Servicer?

If Navient is your student loan servicer, you still have to make your student loan payments in the normal course. For more information, you can contact Navient by phone at 1-888-272-5543 or by email through Navient’s Office of the Customer Advocate.

What Else Can I Do Regarding My Next Navient Student Loan Payment?

Once you know your student loan servicer, make sure you understand your rights and choices:

1. Understand all your student loan options

One role of your student loan servicer is to help you understand your available options with regard to your 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

2. Understand the potential changes to your student loans in the Trump administration

There may be several changes to your student loans in the Trump administration. You can read more about the potential student loan changes and learn more about Secretary of Education nominee, Betsy DeVos’ views on student loans.

3. File a complaint

If you feel you have been wronged by your student loan lender or your student loan servicer, you can make your voice heard by sending a formal complaint to:

• U.S. Department of Education
• Consumer Financial Protection Bureau
• Your lender
• Your servicer

4. Pay Off Your Student Loans Faster

One of the best ways to avoid dealing with student loan servicers is not to have one. The sooner you pay off your student loans, the better.

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If you have Navient student loans, then pay attention.

The lawsuit filed last week against Navient, the largest student loan servicer in the country, hit home with many borrowers with Navient student loans who say they have had similar experiences.

Lost paperwork. Misapplied payments. Surprise late fees. Processing delays. Overall confusion.

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If you have Navient student loans, here are some more action steps that you can take to protect your interests and take control of your student loans:

1. Navient Student Loans Tip #1 – Always communicate in writing

If you have Navient student loans, how many times have you called Navient and been assured that your request was processed, only to find out later that this was not the case?

Not only is it frustrating, but it is also may be difficult to dispute later — particularly if your student loan servicer’s error resulted in a late fee or some other expensive miscalculation.

If you have Navient student loans, make sure to put all correspondence in writing.

This includes formal requests, payment instructions and any other material issues related to your student loans. When you keep an organized paper trail of your correspondence, you will have all supporting documents in one place in case of any issues.

2. Navient Student Loans Tip #2 – Sign up for automatic payments

Enrolling in automatic payments is a must-do for any student loan borrower.

In many cases, you may be eligible for a 0.25% interest rate deduction when you enroll in automatic payments.

This will also help ensure that your student loan payment reaches your student loan servicer on time each month. Do not rely on sending a paper check via regular mail because there is no guarantee that your check will arrive on time or at all.

There are two primary ways to enroll in automatic payments: one is with your bank and the other is with your student loan servicer’s online platform. The preferred method is to enroll directly with your student loan servicer’s online platform so that you can create a direct paper trail in case of any dispute. Plus, free bill pay at some banks is sent via paper check (rather than electronically through ACH), which can lead to further delay.

Enrolling in auto payments will be particularly important if your student loan servicer changes during the course of your student loan (which you should expect to occur at least once). When your student loan servicer changes, make sure to update your automatic payment information to your new student loan servicer (and stop automatic payments for your previous student loan servicer).

3. Navient Student Loans Tip #3 – Monitor your credit score

If you have Navient student loans, your outstanding debt and your ability to make on-time monthly payments impact your credit score.

Therefore, it is essential that you regularly monitor your credit score and credit reports for errors. There are three major credit bureaus: Experian, Equifax and Transunion. You can request a copy of your credit report from each lender, or check AnnualCreditReport.com.

Don’t rely on your student loan servicer to make sure your student loan payments are reported accurately to the credit bureaus. If the CFPB lawsuit allegations are correct, it is possible that your student loan servicer will make mistakes throughout the life of your Navient student loans.

Therefore, it is incumbent upon you to be vigilant and pro-active to spot any mistakes as soon as they happen so you can correct them.

You’re right – this shouldn’t be your responsibility to have to double-check your Navient student loans. Unfortunately, it is a feature of the imperfect student loan system. However, you will save time and avoid stress by monitoring your credit reports regularly to ensure accuracy.

4. Navient Student Loans Tip #4 – Contact the U.S. Department of Education

If you have Navient student loans and feel that you are being treated unfairly by your student loan servicer, or you otherwise want to file a formal complaint regarding your federal student loans (e.g., Stafford, Direct, PLUS, Perkins), you can contact the U.S. Department of Education through the Office of Federal Student Aid. You can expect to hear back from the U.S. Department of Education within 15 days and be provided with a resolution within 60 days.

5. Navient Student Loans Tip #5 – Contact the Consumer Financial Protection Bureau

If you want to file a formal complaint regarding your private student loan (e.g., issued by a bank, credit union or school) or your federal loan servicer, contact the Consumer Financial Protection Bureau.

The CFPB is charged with supervising financial services companies and enforcing 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.

6. Navient Student Loans Tip #6 – Understand all your student loan options

One role of your student loan servicer is to help you understand your available options with regard to your student loans.

However, don’t rely solely on your student loan servicer to provide you with all the facts regarding your Navient student loans. Do your homework, invest the time and get informed. Your financial situation is unique, and therefore you need to find the option that is in your personal best interest. Don’t let your student loan servicer steer you toward a short-term option when you should choose the long-term solution.

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If you have Nelnet student loans, then pay attention.

Here are 9 student loan hacks from borrowers with Nelnet student loans – as well as answers – that can help guide your path forward:

1. Nelnet Student Loans Hack #1 – I have a private student loan and I work as an educator. Can I qualify for teacher loan forgiveness?

If you have Nelnet student loans, unfortunately, private student loans are not eligible for Teacher Loan Forgiveness. However, teachers with federal direct 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.

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.

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2. Nelnet Student Loans Hack #2 – If I have a student loan from Sallie Mae, is it considered a government loan?

If you have Nelnet student loans, then you likely do not have a student loan from Sallie Mae.

The short answer is “no.”

In 1972, Sallie Mae, or the Student Loan Marketing Association, was established as a government-sponsored enterprise, or GSE. Sallie Mae was then privatized in 2004 when Congress terminated Sallie Mae’s federal charter.

Today, Sallie Mae is a publicly traded company (not part of the federal government) that offers private student loans. These student loans are not federal loans, since federal loans can only be issued by the federal government.

Prior to October 2014, Sallie Mae was a loan servicer for two federal student loan programs: the Direct Loan Program and the Federal Family Education Loan Program (FFELP). That same year, Sallie Mae split in two: the consumer banking business became known as Sallie Mae, and the student loan servicing operations became Navient.

3. Nelnet Student Loans Hack #3 – If I have Nelnet student loans and am unemployed, can I enter an income-driven repayment plan?

If you have Nelnet student loans and are unemployed, you can enroll in an income-driven repayment plan such as Income-Based Repayment (IBR), Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE). Under these plans, if you have Nelnet student loans but have no income, your monthly student loan payment would be $0.

While your monthly Nelnet student loans payment would be $0, interest on your Nelnet student loans would still accrue. Therefore, during the period in which you are enrolled in an income-driven repayment plan, you should expect your Nelnet student loans balance to increase since you are not reducing your principal.

4. Nelnet Student Loans Hack #4 – I wrote clear instructions on the check for my Nelnet student loans payment. However, Nelnet did not follow my instructions. What recourse do I have?

If you have important instructions for your Nelnet student loans, you should always communicate in writing.

However, you should send Nelnet a formal written correspondence. This includes formal requests, payment instructions and any other material issues related to your Nelnet student loans. Your student loan servicer may not manually review each paper check, and therefore your instructions may be overlooked.

Sending paper checks should be avoided in favor of automatic payment enrollment.

In many cases, you may be eligible for a 0.25% interest rate deduction when you enroll in automatic payments. Enrolling in automatic payment (preferably directly with your student loan servicer, rather than your bank) also will help ensure that your student loan payment reaches your student loan servicer on time each month.

5. Nelnet Student Loans Hack #5 – What happens if the Navient lawsuit is “successful?” Do I get compensated?

If you have Nelnet student loans, you may be wondering how the Navient lawsuit may impact you.

The lawsuit against Navient was filed by the Consumer Financial Protection Bureau (CFPB), which is a federal government agency. Therefore, this lawsuit is not a class action lawsuit. At this juncture, there is no indication that Nelnet is facing a similar lawsuit from the CFPB.

If your student loans are serviced by Nelnet, you probably should not expect any compensation at this juncture.

6. Nelnet Student Loan Hacks #6 – Can I change my student loan servicer?

If you have Nelnet student loans, generally, you cannot change your student loan servicer.

However, you should expect that your student loan servicer will change at least once during the course of your student loan repayment. Why? The U.S. Department of Education may transfer your federal loan to a new student loan servicer to ensure that you have proper customer service and repayment support.

One way that you can change your student loan servicer is through student loan consolidation.

If you consolidate with a Federal Direct Consolidation Loan, your existing student loans are combined into a single student loan with a single student loan payment. However, your student loan interest rate does not decrease.

When you consolidate your student loans, you can choose one of four student loan servicers: Navient, Nelnet, Great Lakes Educational Loan Services or FedLoan Servicing. There is no guarantee that after your select a student loan servicer that your student loan is transferred to another student loan servicer.

7. Nelnet Student Loans Hack #7 – I read that one way to pay off your student loans faster is to make an extra student loan payment. Will I be charged a fee for paying off my Nelnet student loans early?

No. All federal and private student loans do not include a prepayment penalty.

Therefore, there are no fees to pay off your Nelnet student loans faster, including making additional student loan payments.

Absent any instructions from you, a lender will apply your student loan payment in the following order: late fees, collection costs, interest and principal.

If you make an extra payment, lenders are permitted by federal regulations to apply a prepayment to future payments (absent any instructions to the contrary). If you would like an extra payment to be applied first toward principal, send written correspondence with clear instructions to your lender. Similarly, you can instruct your lender to apply an extra student loan repayment toward your student loan with the highest interest rate.

8. Nelnet Student Loans Hack #8 – I have a variable interest rate student loan and am concerned that my monthly payments will increase now that interest rates are rising. Am I stuck?

You are correct that as interest rates rise, your variable interest rate on your Nelnet student loans will also rise.

However, not all is lost. You can choose to refinance your Nelnet student loans from a variable to a fixed interest rate student loan. With a fixed interest rate student loan, your interest rate will stay the same so long as your student loan is outstanding – regardless of interest rate movements (up or down).

9. Nelnet Student Loans Hack #9 – My student loan servicer told me that if I have private student loans, no lender will refinance them.

Not true. You can refinance all your student loans – both government and private.

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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If you have used Twitter in recent days, you may have noticed a trending hashtag: #DeleteUber.

The hashtag relates to a social media campaign aimed at drawing attention to Uber’s actions in the immediate aftermath of one of President Trump’s most recent and controversial executive orders.

Over the past several days, it is not uncommon for Facebook and Twitter users to post photos of themselves deactivating their Uber accounts while encouraging others to download alternative ride-sharing apps such as San Francisco-based Lyft.

But who benefits when you delete Uber from your smartphone? It may not be who you think.

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Here is what you need to know about #DeleteUber and who benefits if you decide to delete your Uber account:

The Origin

Started by Chicago journalist Dan O’Sullivan, #DeleteUber is a social media campaign that urges Uber customers to delete their Uber account to protest President Trump’s executive order to ban refugees and immigrants from seven Muslim-majority countries from entering the United States.

On Saturday, after Trump’s executive order was announced, the 19,000-member New York Taxi Workers Alliance, a non-profit union, called for a one hour halt to taxi rides en route to John F. Kennedy airport in New York to show support for anyone held at the airport as a result of the executive order.

After the one hour strike ended, Uber tweeted that “surge pricing has been turned off at JFK Airport.” Accordingly, Uber continued to send drivers to JFK. However, Uber’s tweet was interpreted by many as allegedly breaking the strike to profit.

Uber then attempted to clarify that it had no intention to break the strike with a tweet early Sunday morning and a message from Uber CEO Travis Kalanick. Uber also set up a $3 million legal defense fund for immigration defense and services.

“Drivers who are citizens of Iran, Iraq, Libya, Somalia, Sudan, Syria or Yemen and live in the US but have left the country, will not be able to return for 90 days,” Kalanick wrote in a Facebook post. “This means they won’t be able to earn money and support their families during this period. So it’s important that as a community that we do everything we can to help these drivers.”However, Uber customers criticized Uber’s response to the executive order and started a social media campaign to encourage customers to delete their Uber accounts. Further, some Uber users have taken issue with Kalanick’s participation on Trump’s business advisory council, which also includes the chief executive officers of Disney, Pepsi and Blackstone, among other.

Enter Lyft.

Lyft Downloads Skyrocket

Meanwhile, Uber’s chief competitor, Lyft, capitalized on Uber’s public relations issues. Lyft publicly criticized the president’s executive order and donated $1 million to the American Civil Liberties Union (ACLU), which opposes the immigrant ban and filed a class action suit on behalf of two Iraqis temporarily detained at JFK.

Lyft’s actions resonated throughout social media and helped fuel the #DeleteUber campaign. According to Tech Crunch, as a result of this past weekend’s activities and the #DeleteUber campaign, downloads for Lyft skyrocketed in the iPhone App Store. At one point on Monday, Lyft ranked as the #6 free app – ahead of YouTube, Messenger, Facebook, Google Maps, Netflix, Spotify, Pinterest, Amazon, Twitter, Pandora and Uber.

Meet The Real Beneficiaries

As some customers replace their Uber app with Lyft to protest Trump’s executive order, they may want to take a closer look at some of Lyft’s investors.

Like Uber, Lyft has attracted an impressive cadre of investors, including Alibaba, Andreessen Horowitz, Third Point, General Motors, Coatue and Fortress, among others.

If you are deleting your Uber app to protest the Trump administration, two Lyft investors, in particular, may stand out given their connections to the president.

In 2015, investor Carl Icahn invested over $100 million in Lyft. His company, Icahn Enterprises, also has a Lyft board seat. Icahn currently serves as a special advisor to the president, a position he was appointed to last December.

In addition to Icahn, Peter Thiel’s Founder Fund led Lyft’s Series B round, and also invested in two subsequent fundraising rounds. Founder Fund, with venture capital firm Andreessen Horowitz, sold approximately $75 million of Lyft shares to Saudi Prince al – Waleed Bin Talal’s Kingdom Holdings as part of the $1 billion Series F fundraising round. Thiel, an early investor in Facebook and a co-founder of Paypal, also served as a member of Trump’s transition team.

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It’s tax time, and you may be expecting a tax refund this year.

In 2016, the average tax refund was $2,860. According to the IRS, 111 million tax refunds totaling over $317 billion were issued last year.

If you are expecting a tax refund this year, should you save it or spend it?

Neither.

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You should invest your tax refund and here are 5 smart ways to make an investment in your financial future:

1. Make this the last year you ever receive a tax refund

It feels exciting to get a tax refund. Who doesn’t like receiving their hard-earned money back in their pocket?

But, that tax refund is costing you.

Every day without that tax refund means you are losing out on investing those funds in your financial future.

It’s called the time value of money: a dollar today is worth more than a dollar tomorrow. Why?

You can invest those funds and earn a financial return on your money. Therefore, you prefer to have your money sooner rather than later so that you can invest (and earn interest) or reduce debt (and save interest).

Next year, set a financial goal to eliminate your tax refund. Yes, eliminate it.

When you receive a tax refund, it means that you overpaid your taxes.

When you overpay your taxes, it means that you gave a free loan to the government and never got paid for it.

Think of your tax refund as the government repaying that loan – without paying you interest – by simply giving you your money back. While the government had access to your money, you didn’t.

Contact your human resources department and update your tax forms to reflect your anticipated tax rate and deductions. You can use this year (and perhaps past tax years) as an approximate guide.

You may not be able to eliminate your tax refund completely, but the net result is that your paycheck will be higher each pay period and your tax refund will be closer to zero. This way, you will have more funds at your discretion to invest during the year, rather than waiting for a refund after tax time.

2. Start an emergency fund

You never know when an emergency will strike. Whether it’s an unforeseen medical expense, home repair or unemployment, don’t get caught off guard.

Build a financial foundation with at least six to nine months (or more) of cash to cover expenses. You can use your tax refund to help start an emergency fund if you don’t already have one or add to an existing emergency fund if you do.

Keep this cash in a separate bank account and only break the glass in case of emergency.

3. Pay down your credit card balance

If you have existing credit card debt, you can take two actions steps to get out of debt and save money.

First, you might be able to obtain a personal loan at a lower interest rate than your existing credit card interest rate.

For example, if you have $5,000 of credit card debt at 14% interest and can obtain a personal loan at 6% interest (depending on your credit profile and other factors), you can consolidate your credit card debt and potentially cut your interest payments by more than 50%.

Second, you can use your tax refund to make a one-time, lump-sum payment to pay off your credit card debt. Like student loan debt, make sure that your one-time payment is applied directly to your principal loan balance (not toward next month’s regular monthly payment).

4. Fund A Roth IRA

Use your tax refund to fund a Roth IRA, which is one of the best ways to invest in your financial future.

What is a Roth IRA?A Roth IRA is an individual retirement account that you can fund with after-tax money. You can invest the funds in your Roth IRA just like a regular investment account. Unlike a Traditional IRA, the funds in a Roth IRA grow tax-free since they are taxed upfront.

If you withdraw any funds from your Roth IRA after age 59 1/2, they are yours to keep without paying any taxes. Also, unlike a Traditional IRA, you are not required to make mandatory withdrawals from a Roth IRA at age 70 1/2.

For the 2018 tax year, there are limits on who can contribute (and how much you can contribute) to a Roth IRA.

If you are younger than 50 years old, you can contribute $5,500 per year.

If you are 50 or older, you can contribute $6,500 per year. You can only contribute to a Roth IRA if your adjusted gross income is less than $133,000 for single filers and $196,000 for married couples (although phase outs begin for income at $118,000 and $186,000, respectively).

You can open a Roth IRA with most brokerage firms. You have until Tax Day each year to fund your Roth IRA. This year, income taxes are due April 18, 2018.

5. Make An Extra Student Loan Payment

One of the best strategies to pay off student loans faster is to make an extra student loan payment. Since there are no prepayment penalties on your student loans, you can use a portion of your tax refund to make a lump sum student loan repayment.

Contact your student loan servicer in writing and explain that you want to make a one-time, lump sum student loan payment toward your student loan principal (not to next month’s regular monthly payment).

The more you can chip away at your student loan principal, the more you will save in interest costs.

These 5 “investments” might not be your favorite way to spend your tax refund – but they will help put you on the fast track to financial freedom.

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Is it possible to pay off student loans and save for retirement?

For many student loan borrowers, it may seem daunting both to pay off your student loans and save for retirement.

Everyone wants to do both, but it may be financially challenging or hard to find the right balance.

So, let’s explore your options and determine which option works best for you.

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The Student Loan vs Retirement Reality

According to Mentor’s Student Loan Debt Statistics For 2018 Report, there are 44.2 million borrowers in the U.S. who hold more than $1.3 trillion of student loan debt. Of this total, more than two million student loan borrowers have student loan debt greater than $100,000, with 415,000 of that total holding student loan debt greater than $200,000.For many student loan borrowers, saving for retirement is a distant goal often displaced by an immediate goal to pay off student loans.

That’s a natural thought process. Psychologically, it can feel better to pay off debt first.

Think of it this way, though.

Your student loans represent your past. They were essential to help you obtain your degree and advance in your career, but now that you have graduated, your education is behind you. You know that your goal is to reduce your student loan debt each month, but for each day they are outstanding, your lender makes more money in the form of student loan interest. From your lender’s perspective, you are an investment in your lender’s future.

What about your investment return?

Saving for retirement represents your future. Whether you’re in Generation X, Y, Z or a Millennial, it is never too early to start saving for retirement. Saving for retirement should not be viewed as another monthly expense. Rather, saving for retirement is an investment in your future. For every dollar invested in a retirement plan between now and your retirement, that investment will continue to grow through the power of compounding.

For example, if you contribute $100 per month to a retirement plan starting at age 25 until you retire at age 65 and your investments earn 8% per year, your retirement account balance will grow to $354,075.

Therefore, a dollar saved is several dollars earned.

Should You Focus On Student Loan Repayment or Retirement?

The best answer: you should do both. If you have the financial resources, focus on student loan repayment and retirement. (We will discuss how to balance these two in a moment).

After living expenses, taxes and other loan payments, however, balancing both student loan repayment and retirement investment is easier said than done for many student loan borrowers.

Here are three main options for you to consider:

1. Pay off your student loans and save for retirement later
2. Save for retirement now and pay only the minimum student loan balance each month
3. Pay off your student loans and save for retirement simultaneously

Option 1: Pay off your student loans and save for retirement later

This may feel like the best option because this option enables you to be debt-free first.

However, this is a common mistake and the least desirable option. When you borrowed your student loans, you may have hoped to pay off your student loans within several years after graduation. The reality is that it may take longer than you expect to pay off your student loans. The longer you wait to save for retirement, the less money you will have by the time you retire.

There is an exception to this rule.If you have private student loan debt at an interest rate higher than your anticipated investment return of your retirement portfolio, then arguably you could focus on repaying your higher interest student loan debt first. Since your student loan interest rate is higher than your investment return, you would save more money in interest costs than you could generate in investment returns.

Like any investment decision, there are other considerations such as taxes and student loan interest deductions or credits, among other considerations. However, tax-deferred retirement accounts are one of the best ways to grow your retirement portfolio.

If you have multiple student loans with varying interest rates, then focus on repaying only the student loans with interest rates higher than your anticipated stock market return. Then, if financial resources are limited, start saving for retirement as soon as possible (but do not wait too long).

Option 2: Save for retirement now and pay only the minimum student loan balance each month

This option is the inverse of Option 1. If you invest your retirement funds in the stock market, for example, do you anticipate that you will earn a higher investment return than your highest student loan interest rate? If so, then you will generate a higher investment return – and therefore more money – than you would by paying down your student loan debt at a lower interest rate.

Option 3: Pay off your student loans and save for retirement simultaneously

This is your best option and here is how to balance between paying off your student loans and saving for retirement.

With this option, you can take the dual path toward repayment and investment. You are reducing debt and saving for your future – and most importantly, starting early.

Remember, if you meet the requirements and have a strong credit profile (or a co-signer with a strong credit profile), you can refinance student loans to lower your interest rate. You can use the “savings” from student loan refinancing to invest more in your retirement account.

For example, if you have $100,000 in student loan debt and refinance your student loans from an 8% interest rate to a 4% interest rate, you cut your interest costs from $8,000 to $4,000 per year. You can apply the $4,000 that you effectively are saving toward your retirement account.

You also have the option of student loan repayment plans and student loan forgiveness, including Public Service Loan Forgiveness and Teacher-Student Loan Forgiveness.

How much money should you put toward paying off student loans vs. saving for retirement?

Don’t forget your employer match

If your employer offers a 401(k) match, consider this free money. With an employer match, your employer typically matches dollar-for-dollar your 401(k) contribution up to a certain dollar limit threshold.

For example, if your employer matches up to 5% of your salary, and you earn $50,000 per year, that means your employer will match your first $2,500 in 401(k) contributions.

Therefore, if you contribute $2,500 to your 401(k), then your employer will contribute $2,500 and suddenly you have $5,000.

At a minimum, you should contribute enough to receive your employer match.

Credit Card Debt

If you have student loan debt and credit card debt, the interest rate on your credit may be substantially higher. In this case, you will want to pay off your credit card debt first (given the higher interest rate), or consider a personal loan, which can potentially cut your interest rate in half.

Final Thoughts

Always pay at least the minimum student loan payment.

Don’t skip any student loan payments because the penalties can be severe.

Start saving for retirement as early as financially possible by contributing to your 401(k).

Benefit from the power of compounding.

Take advantage of your company match.

Evaluate the interest rates on your student loans and compare them to your target investment returns.

Student Loan Hack: Contribute to your 401(k) to help qualify for the student loan interest deduction

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.

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

If your income slightly exceeds the income cap, contribute enough funds to a 401(k) to lower your modified adjusted gross income below the income cap. This way, you can save for retirement and qualify for the student loan interest deduction.

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