Student Loan Repayment Plan

I’ve been thinking about our student loans lately because payment is starting up again. The Covid forbearance ended in September 2023 and our first payment since March 2020 would have been in October.

 

At the beginning of October, my financial planner and I had a phone call with a consultant named Jason from Student Loan Planner. I’ve listened to the SLP podcast on and off for a few years and suspected that my husband and I could be on a better plan for our student loans, so I made the $599 consultation appointment.

 

We got great news and a great plan—as long as a future president doesn’t cancel or change some of the current plans, which definitely could happen but should take a while even if elected.

 

The great news is a lower payment (about $550 instead of $750) for a shorter period of time (7 years instead of 18 years) before forgiveness. The plan was to consolidate our loans, change to the SAVE plan and wait for the one-time adjustment where the Department of Education does its magic and puts all our payments together so that we only have 25 years of repayment total instead of 25 years repayment since finishing school.

 

As soon as I went through the process to consolidate the loans, we were put on administrative forbearance. That means we don’t pay anything (yes $0) while the Dept of Ed is doing the work of consolidating. Our loans were consolidated in about 2 weeks and our forbearance lasted about 3 months. I did not complain.

When we got notice of what our payment would be, it went up! Jason from the Student Loan Planner told us the payment would go down to about $550 and It went up to about $2K. I know Jason isn’t the Dept of Ed—he’s simply a consultant, but I trust him and I want his information to be true (😊) so I looked into things.

Well, our consolidation went through, but we were told by our student loan servicer Aidvantage that our application for the SAVE plan would be processed in 2024. I was hopeful that the application would go through before our February payment is due, but that seems unlikely. In fact, the application can be processed anytime in 2024, so we may have to pay $2K a month until the end of the year. That’s $22,000, which really negates the planning we did in the first place. (With our original payment, we would have paid $8,250 over 2024).

I don’t know how this part works, but our consolidation tripled our payment. Now, we had to do a consolidation before we applied for the SAVE plan, and we’ve done everything we can do for now. It’s up to the Dept of Ed to process the application. I don’t believe the government wanted to make paying student loans harder, but I am also not sure Aidvantage, the loan servicer, wants to wait any more for payment.

My goal is to get back onto administrative forbearance until the Dept of Ed is able to do its part of the process.

If we could start paying the $550 a month now, that’d be great, but that is not how things work. I wouldn’t trust Aidvantage to put the money towards the correct loans, we’d probably be in default since we wouldn’t have paid the full $2, and trying to get a full refund after the fact isn’t easy.

I’ve communicated a bit with our loan servicer Aidvantage, and so far I have had no luck resolving the issue. I’m going to try one more email to Aidvantage, then a phone call, and if that doesn’t work, I’ll send a letter to the Dept of Ed. I cannot find a phone number and Aidvantage would not/could not give me a phone number for the Dept of Ed.

Working on this post, I notice I didn’t write anything about what seems to be a fair payment or what is “right” or “wrong” about the situation. I have lots of thoughts about all that too as do many people who do and do not have student loans; it seems to be that morality is a non-issue in terms of how this all works. It’s about rules and laws and loopholes and for me for now, it’s about doing what we can to pay the least possible so we can use our funds for more joyous purposes.

Peace Out (and In),

Julie

Other Posts on our Student Loans ~
Loving the 0% Loan Interest 3/29/20

Married with Student Loan Debt 2/15/18