My old government loan servicer had me on a 25 year repayment plan, things were good. It got transferred to a new company, SAF. SAF changed the repayment term to 10 years, thus dramatically increasing my monthly payment. Is there anything I can do about it? I can't afford the new payment, they claim it was that way all along but according to the original promissory note it stated 25 years. Can I do anything about this?
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Update: Got the real story - IBR will change your loan from 25 to 10 year repayment based on some formula that is based on your income. You can't change it back to 25. They claim that I can now afford a higher monthly payment because I made $2k more money last year from the previous year, even though that means a more than double monthly repayment. So tired of this stupid student loan game where I always lose. -
Additional update: I did my own research and found that they (SAF Montana) offers an "extended repayment plan" It's a flat 20 year payback, monthly amount based on principal and interest rates. Of course even when I asked if I could lower my payment they said there were no options.....I tell them about this plan and she was like "Oh, yeah, I forgot about that...." Anyway, it did lower my payment per month and extend the term but here's the BAD news - it forced a re-capitalization of the loan! Loan started in 2003 at $30k. I've been paying $175 every single month for almost 10 years, after the capitalization, the principal is now $31k!
ALSO, you know that B.S. Obama was saying about "you pay on your govt. loans for 25 years and the rest is forgiven" Well that's a bold-face lie because in changing my payment terms, the clock reset on the 25 years and now next month I start paying at month 1 all over again.
I believe that these loans are more of a ticking time bomb than the housing bubble crisis ever was and as soon as most people wake up and understand how unfair all of this is, there will be many angry people in this country. For me anyway, this loan payment guarantees that unless I land a miracle job suddenly making double my salary I will never be able to save up a down payment on a house and become trapped into lifetime renting, probably this 900 sq ft piece of crap apartment with no parking, no yard, all the while watching my neighbors living off welfare, ssi, and fake disability having way more disposable income than I will ever have.
Sorry for the rant.....so frustrated. I should have never gone to college for my worthless degree in chemical engineering.Comment
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I don't see how the capitalization made the loan bigger. The $175/mo should have been paying down the principal a bit. Are you sure there were no fees for missing a payment?Originally posted by gml120 View Post
As for Obama's "B.S.", that program is for going forward - previous time does not count. And if you are struggling financially, your payment is low (can actually be zero), and at the end of 25 years, it gets discharged - it can't get much fairer than that (thank your deity that you do not have a *private* loan.)
As for watching your neighbors on welfare, if you can get in the same financial situation as them, you can get the same welfare. After my BK, for the first time in nearly 2 decades, I did not have any liquid assets (i.e., outside of retirement accounts), and was able to get SNAP benefits (i.e., food stamps), and had I not been a homeowner, I could have gotten Section 8 as well.
And as for being mad about folks on disability, let's hope that you remain healthy enough to not have that option. With that said, I think that the current welfare system is arbitrary and does have some folks defrauding it. I think that a guaranteed income program would serve the purpose of being welfare for those who truly need it, a way to eke out student loan payments for folks stuck in a low paying job, and a general boost to other folks in low paying jobs, as a way to redistribute the money that the wealthy have stolen (ethically speaking) from the working class.Comment
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There were no missed payments - After much calculation on my part, I figured out that when I applied for the IBR, they capitalized. Then when I had to switch to the extended, they capitalized again. It added $1800 to the principal in one week. Also, my loan was bought by SAF I got some letter telling me that my old servicer "forgot" to capitalize my interest many years ago so they added an additional $1k to the principal. Even though I had all my records from the old company it didn't matter to the new one. I believe they said something to the effect of "we can only work with what THEY told us, sorry". I can't even talk to my old servicer because I don't have an account with them any more. I think the Obama program is BS because in 25 years I will be 61 years old. Gee thanks for the break.. But it only works if you are on the IBR program. If the loan company decides that your IBR repayment schedule only lasts 10 years...you don't have the option to have it forgiven in 25.
The real problem here is that the IBR takes both mine and my husband's salary from our married filing jointly and though if I filed on my own, my payment would be 0, filing with him makes my payment $190 ish and also his payment $190 ish. I did the math on married filing separately but that was bust too - he got totally nailed with taxes that way > than the current loan payments.
We are struggling financially but looking at our incomes most people would think that we're sitting pretty (we make about $68k a year together). Mostly because sadly we both have private loans in addition to the federal ones. All the payments added up per month equal just over $900 a month for all loans. That's a damn fine house payment right there. The reason I don't work right now is because of the cost of daycare. Shortly after my son was born I quickly realized that it cost me more than 100% of my income to pay for daycare and gas, I've tried to find work for over $10/hr and have turned up nothing. And there's no one in my family that is willing to watch him for free. My husband travels so much for work and the trips aren't announced too far in the future that I've lost more jobs I can count due to missing work because he is not home to watch the baby for me to leave.
But you're right, the privates are also ridiculus. I've been paying on a $8000 loan since 2003, no deferments, no graduated payments, just straight $100/month but due to the variable intrest I've paid $7500 off and still owe $5500. It never ends.Comment
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