Public service loan forgiveness

roll truck roll — Fri, 27 Jun 2008 11:40:54 -0800

So, is there any reason not to go for the new public service loan forgiveness program? I work at a nonprofit that qualifies for the program; my wife works for a small museum technology firm and makes even less than I do. We have loans from college and graduate school spread across four banks - all of them can be consolidated.

We're both pretty clueless about financial things. Based on some very rough calculations, I think that if we were making income-contingent payments, we'd be paying a couple hundred less per month than we are now, a difference that would actually make a huge change in our day-to-day finances.

So really, my question is this: what are we not taking into account? Are there any pitfalls associated with government consolidation? Are there any caveats or loopholes in the forgiveness program? Since the program is so new, I'm having trouble finding much information about it online. I can only assume that other MeFites are in similar situations right now, so if you have more information about how the program works, this might be a good place to post it. Thanks.

Help me set Maw up for another 67 years of financial well-being

Mutant — Tue, 25 Jul 2006 06:32:14 -0800

Forgiving or otherwise reducing Maw's debts? As a followup to this question, I've arrived at an effective financial mechanism to help me provide for Maw, however while evaluating her overall financial health I learned that she's acquired alarming (given her previous state of relatively low income) debts.

Specifically, at 67 years of age she's never earned more than $18K, but somehow has managed to convince three lenders to front her some $20K in debt. I believe most of this is unsecured, but I haven't seen all the paperwork yet and as a further indication of Maw's lack of financial knowledge she has no idea herself. My current activities have been focused on migrating higher interest rate debt into lower rate facilities, but the final outcome is unsatisfactory even if I can get all of her debts into a secured vehicle.

Clearly it doesn't make any sense for me to be supporting Maw if over one third of her current source of income (Social Security) is absorbed by debt service. I work in banking and just by looking at her age (not to mention low income) consider this an example of irresponsible lending, so what are the options here for debt relief / forgiveness or outright bankruptcy?

Can I negotiate on her behalf? I suspect she'd have to appoint me her financial guardian (of sorts, not sure what this is really called in practise, I'm just aware of the term from BSchool), otherwise these folks won't talk to me. If I do undertake negotiations on her behalf, I'd want to know what my ultimate fall back is so I can play hardball, so does this strike any of you as a clear cut case for bankruptcy?

I've been living in the UK full time since 1998 and for about one year before that I divided my time between New York and London, so I'm more than a little in the dark on these matters back in the US. Any ideas on the path of least resistance? Are these debt counseling services really worthwhile engaging?

I'm not adverse to personally paying off her debts if we could get them reduced somewhat. If this negatively impacts her credit, all the better from my viewpoint as she can't hold onto money. Any suggestions for helping Maw weather another 67 years in improved financial help welcomed.

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Public service loan forgiveness

Help me set Maw up for another 67 years of financial well-being