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Get in touch and we'll get back to you as soon as we can. We look forward to hearing from you!
The overriding difference with private loans is these are loans taken out through a private institution or bank. They are in no way, shape or form linked to the Federal Government.
We have very effective Private loan programs but they are obviously not done through the Federal Programs outlined above but rather through a separate department here at Red Bishop. Please fill in your details so that we can assess your situation and look at your options.
Private Parent Loans
There are both Private and Federal loans available to parents. If you have co-signed on a loan, you have a Private loan provided by a lending institution other than the Federal government. Think of this like a co-signed car loan. If the loan becomes delinquent, you ultimately are responsible for repayment.
Pros:
Cons:
Federal Parent PLUS Loans
There are also Federal loans available to assist dependents. These loans are completely the parents obligation. Federal loans have multiple repayment and forgiveness options that are not available by Private lenders.
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Cons:
Private vs. Federal Parent Loans
Generally, the Federal loans offer more flexible repayment plans and have potential forgiveness, while Private loans often have lower interest rates. Ultimately both should be considered to find the best options for your situation. If you already have loans, look “here” for repayment estimates on your Federal loans, or call and speak with a Pro who can review your situation and offer specific options and alternatives.
* Term lengths are set on the amount borrowed, but remember you can always pay more than is required, therefore shortening the term length and saving money in the long run.
Consolidation of your Federal Student Loans may help!
When you consolidate your Federal loans, outstanding individual loans are combined into a single new loan. This will provide some significant benefits.
Federal vs Private Student Loan Consolidation
Understanding the differences will help you determine the best choice for your individual situation. Both options may help reduce monthly payments through interest reductions (Private) or by utilizing Federal Income Based Repayment plans (Federal). However you should keep in mind that if you Consolidate Federal loans into a Private loan, you will be losing significant payment flexibility and forgiveness options that are not available through Private lending institutions.
Federal Student Loan Consolidation Process
The Federal Government has created multiple plans to assist loan holders who wish to lower their monthly payments and also qualify for long term loan forgiveness. We are asked every day “is there really such a thing as loan forgiveness”. The answer is: Absolutely yes! However it doesn’t work the way most people think that it does. Here is an outline of how the process works. 4 Steps!
Recognized benefits of Federal Student Loan Consolidation
No matter what the status of you loans may be (deferment, forbearance, current, late, defaulted, default with tax offset, default with wage garnishment) there is likely a path to accomplish consolidation, income driven repayment and possible loan forgiveness
William D. Ford Direct Loan Program
This program offers the most encompassing benefits and if often referred to as Obama Student Loan Forgiveness. By Consolidating loans into a William D. Ford Direct Loan and enrolling in an Income Driven Repayment (IDR) plan, loan holders qualify for forgiveness at the end of the term of their loan which is 20-25 years depending on their initial loan balance. There are multiple IDR repayment options that qualify for forgiveness under the William D. Ford program. Additionally, there is accelerated forgiveness available for specific borrowers depending on who their employer is. Employer status can reduce payments by as much as 15 years and dramatically increase the amount forgiven.
Public Service Forgiveness
Individuals may qualify for Public Service Forgiveness if they are employed by a qualifying employer. If so, forgiveness is accelerated by as much as 15 years offering a huge by eliminating loans tax free. This program clearly offers the most economic advantage. Keep in mind, it doesn’t matter what your job is, it only matters what organization pays you.
Total and Permanent Disability Forgiveness
Applicants may be eligible for Total and Permanent Disability on Federal Student loans they are not able to sustain gainful employment on an ongoing basis. Keep in mind that this must be a TOTAL disability as certified by a physician. This certification may be required over an extended period of time, by multiple physicians, before the Government will accept your application and discharge the loans. We have heard from clients that while this process is available, it may also be difficult and time consuming to accomplish.
Teacher Loan Forgiveness
Another option is through Teacher Loan Forgiveness. If you are a highly qualified teacher in a qualifying Public school district you will be eligible to qualify for forgiveness. While there is a limit to the amount of Teacher Forgiveness, a significant benefit is that it is available in as little as 5 years. If an individual has a higher loan balance than is allowed to be forgiven, they may also be able to then apply for Public Service Forgiveness whereby the remaining balance may be discharged at the end of 10 years.
Military College Loan Repayment Program
Individuals entering the military, or transferring from active to reserve status may have accumulated Federal Student Loans prior to their service obligation. The Military College Loan Repayment Program is available to discharge student loans. The amount of this benefit varies for each military branch.