If you’ve clicked on this article, you’re likely feeling a pain point with your student loans.
Student loans can be overwhelmingly complex, so don’t feel like navigating your plan should have been easy.
Federal student loans are unlike any debt out there for a few big reasons:
- Income-based repayment (REPAYE, PAYE, IBR and ICR) is available with many nuances that deserve careful attention.
- Loan forgiveness opportunities like Public Service Loan Forgiveness (PSLF) or taxable loan forgiveness are an option after paying on an income-driven repayment plan for the required repayment period. The success of achieving this forgiveness efficiently depends on the borrower’s thorough understanding of these programs.
- Marital and tax filing status impact income-driven payment calculations, making tax planning a topic of conversation while also planning your student loan repayment strategy.
Here are some situations that may help you determine if you need a student loan consultation. Do any of these common circumstances resonate with you?
1. You just graduated (or you’re about to)
First of all, congratulations! What an exciting time! You’ve worked hard to get where you are today!
- You’ve got a job offer, or you have already started working.
- You’re #adulting and making real money for the first time!
- You’re learning about your employer’s benefits: 401k, HSA/FSA and health insurance.
- You're starting to put together your budget and are dreaming up financial goals like buying a house or upgrading your car.
But then, you get a notice about your student loans… *Insert the “dun dun duuuuuun” music here.
You knew the time to pay your student loans was coming, but now you’re panicking because so many different repayment plans are available, and everyone you ask is telling you to do something different.
You ask yourself: “What is the right plan for my student loans?”
You spend all this money on school to further your career and make a good living, but your college classes don’t teach you how to repay these massive loans.
If this is you, a student loan consultation will give you the clarity you want.
During our meeting, we will review your career and financial goals first. Then, we:
- Look at ALL your student loan repayment options, narrowing in on the most optimal path for you.
- Discuss the pros and cons of that plan compared to other routes you could consider.
- Talk about how to pivot your strategy if things change in the student loan world or your personal or financial life.
What you leave your consultation with is an action plan for your student loans. You feel confident in the strategy and know how to implement it, and having this plan allows you to move on and focus on other financial goals.
2. You need a lower student loan payment
Due to the COVID-19 pandemic, federal student loan payments and interest have paused since March 2020. Payments are expected to start again sometime in 2023.
Whether your financial situation has changed or this is the first time you’re entering repayment, payment affordability is crucial.
Thankfully, federal student loans have repayment options that allow you to base your payment on a percentage of your income. As of the start of 2023, four different income-driven repayment plans exist, and each is different in their unique way.
In our consultations, we:
- Review which repayment plan would be best for you.
- ensure we’re taking advantage of any creative way to save you the most money on that particular plan.
- Explore several strategic loopholes we consider that take advantage of state laws, tax filing statuses and student loan legislation to maximize savings for our clients.
- Help you navigate refinancing if you have private student loans, and talk through your pay-down strategy to save the most money on interest.
There is no such thing as a cookie-cutter student loan repayment plan, and we thoroughly enjoy savings folks the most money possible.
3. You have Parent Plus Loans
Navigating which plan could be right for you can be daunting, especially if you have Parent Plus loans. Parent Plus loans are federal student loans borrowed by a parent of an undergraduate student (or students).
Situationally, borrowers of Parent Plus loans have other financial planning considerations to consider, such as retirement and payment affordability if income decreases in the future.
Parent Plus loans do not have the same repayment plan availability as student loans borrowed by a student. In their current form, Parent Plus loan borrowers only have access to the Standard, Extended and Graduated repayment plans.
These plans are designed to pay the student loan balance in full within 10, 15, 20, 25 or 30 years. The available terms may not provide payment relief if the student loan balance is high relative to your income, so you might need an income-driven payment option.
Parent Plus loans can only access one income-driven repayment option if consolidated, called ICR — but this is the most expensive income-driven repayment plan compared to the other three (PAYE, REPAYE, IBR).
Student loan legislation prevents Parent Plus borrowers from accessing these cheaper income-driven plans. However, we can force access to these more affordable plans using one of my favorite student loan loopholes: the Double Consolidation Loophole.
Our student loan consultations with Parent PLUS loan borrowers confirm if a double consolidation is an option for their specific situation. If so, we will review the exact steps to complete this process. We even offer a follow-up consultation with yours truly to help with the paperwork if you want that extra support.
4. You don’t feel confident about your path to PSLF
Public Service Loan Forgiveness (PSLF) is an opportunity for individuals working full-time in public service. It’s a great program if you intentionally pursue this with your loans.
The program has had issues, and folks can find it hard to navigate all the eligibility requirements. Your due diligence is critical for successfully getting your loans forgiven through PSLF.
The PSLF Waiver, which expired 10/31/2022, was designed to be a second chance for folks to get PSLF credit for previously ineligible payments. That opportunity has since expired (sort of), and permanent changes are coming to the program starting July 1, 2023.
Navigating the eligibility requirements for PSLF and keeping up with the ongoing changes to the program is added work to the responsibility of managing your repayment plan.
Working with Student Loan Planner on your PSLF student loan plan can:
- Bring you the peace of mind of knowing that you’ve done what you need to do to be eligible.
- Teach you how to maintain eligibility for PSLF throughout your career.
- Help you maximize your savings while pursuing loan forgiveness and avoid any unfortunate surprises in the future.
5. You need to know how marriage will impact your student loan situation
Marriage will impact your loan situation in one way or another. Don’t let that scare you away from the altar, though! The good thing is that there is a whole slew of planning opportunities when marriage comes into play!
- If you and your spouse both have loans, we’d want to ensure your plans complement each other, especially if you don’t have the same goals with the loans. We’d also consider the double debt loophole.
- If your spouse does not have student loans and you’re pursuing forgiveness, a tax filing strategy will be essential to consider.
- If you file taxes married jointly with your spouse, your student loan payment will be based on joint income. If you file taxes married separately, you can keep your student loan payment off of your income if you’re on either PAYE, IBR, or ICR.
There are costs to consider, though, when looking into filing separately. Those costs of filing taxes individually need to be worth the savings you reap in your payments for the year.
We can weigh these pros and cons as it relates to student loans and help you make an educated decision here, along with the input from your CPA.
Listen up if you’re married and live in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin). A tax filing strategy is a must here if you’re pursuing forgiveness:
- In our consultations, we’ll consider the breadwinner and the reverse breadwinner loophole and layer in the double debt loophole if applicable.
- Anyone living in a community property state with federal student loans could benefit from a consultation with us since many planning opportunities are available.
6. You’ve had loans for a long time
If you have loans pre-dating 2010, you may have a loan type called FFEL. These types of loans are not issued anymore and come with more limited repayment and forgiveness options.
You may need to look into the IDR Waiver, which would mean consolidating your loans into a federally held loan. Consolidation and the IDR Waiver could get you closer to IDR forgiveness since it counts time spent on any repayment plan and specific deferment and forbearance time.
If you’ve had your federal student loans since the 90s, there’s a good chance you could get your balance forgiven today! Consult with a professional on how to get yourself in the best position for forgiveness or get in a better position to pay these off more efficiently.
7. You want to make sure you’re not missing anything
I get this response a lot when I ask folks why they booked a student loan consultation.
Along with the regular nuances of student loans already described in this article, it is no secret that there have been many changes over the past few years in student loan repayment:
- Payments and interest are continuously getting postponed
- IDR recertification anniversaries changing
- PSLF Waiver
- New PSLF rules
- IDR Waiver
- Borrower's Defense to Repayment
- New IDR Plan?
- 1x Cancellation?
Don’t be embarrassed if you’ve struggled to know what’s relevant to you and what’s not. We’ve been on a rollercoaster the past three years with executive orders, lawsuits and legal battles that have made our heads spin.
Schedule a student loan consultation
Student loans can be a complex debt that most financial professionals either don’t have much experience with or don’t have the comprehensive knowledge to help people navigate their complete repayment options.
At Student Loan Planner®, our bread and butter is student loan repayment and helping people save the most money on their plan.
Everyone on our team is either a Certified Student Loan Professional™ (CSLP®), CFP®, CFA, or some other financial planning designation — we bring the big brains to the table to help our clients tackle their student loans! Book a consultation today!
|Lender Name||Lender||Offer||Learn more|
For 100k or more. $200 for 50k to $99,999
Fixed 5.24 - 9.59% APRVariable 6.24 - 9.99% APR
For 100k or more. $300 for 50k to $99,999
Fixed 4.96 - 10.24% APPRVariable 5.72 - 10.24% APR
For 100k or more. $200 for 50k to $99,999
Fixed 5.19 - 9.74% APRVariable 5.99 - 9.74% APR
Not sure what to do with your student loans?
Take our 11 question quiz to get a personalized recommendation for 2023 of whether you should pursue PSLF, Biden’s New IDR plan, or refinancing (including the one lender we think could give you the best rate).