Consolidating student loans with spouse
I can’t seem to find anything saying whether jointly consolidated loans qualify for forgiveness.In fact, it’s hard to find anything anywhere that address it, other than to say it isn’t possible anymore.What’s really frustrating is that I have been trying to get the loan done for over 6 months and now just found this information out.Unfortunately, I am a social worker in foster care non-profit and do not make ton of money (and a single mom of a 5 year old and struggle to make ends meet monthly).Because bankruptcy is often a consequence of a divorce, it is worth noting that this issue will linger long after the credit cards, car payments, and mortgage are eliminated.Second, the banks and lenders don’t care about the relationship between you and your cosigner.By using the combined income of the couple, they are able to get the lowest possible interest rate and get the debt paid off faster. Responsible personal finance for most couples should include finding ways to make sure you can afford the mortgage for the house you want.
We had direct loans, but the loans as of this year are being paid to Mohela. I haven’t called aobut the forgiveness but anytime I’ve called about anything else they seem to be almost clueless about what to do with our situation other than to remind me we are both responsible for the full amount of the loan. Heather, I spent hours on the phone last week talking with the Direct Loan Program Rep, the Sallie Mae reps and in the end was told what you have shared in this thread, that my ex-husband and I are not elligilble for the PLSF program due to the fact that when we married, we consolidated our loans and are now equally responsible for the debt.
In order to reconsolidate a joint FFEL consolidation loan into the Direct Loan program, there would need to be authorizing legislation that allows DL to make a new joint Direct Consolidation loan. Since both borrowers are “jointly and severally liable”, meaning you are both on the hook for the full balance, they cannot allow each borrower to separately consolidate their respective portion of the joint loan based on the original loans consolidated or for one borrower to reconsolidate the joint loan as his/her loan. I was actually told when we jointly consolidated the loans that, if one of us dies, that portion of the loan would be forgiven for the other party. In any event, this federal program is being offered to some joint consolidation holders and not others solely on the basis of who is servicing the loan, which is discriminatory. How could they close the joint spousal consolidation program because of how bad it was and not give anyone that enrolled in it a way out because it was done through Sallie Mae instead of Direct Loans? My ex-husband and I, divorced for 9 years are jointly repaying over 0,000 in studnet loan debt.
As a taxpayer, I feel that I am entitled to the program just as much as a joint consolidation customer of Direct Loan. From what I can tell we both qualify for the loan forgiveness - we work together at a public university.
However, with the divorce rate at its current level, it is a very real possibility that should be considered in financial planning. There are a number of factors that contribute to this issue.
Many couples choose to get a prenuptial agreement for this very reason. First, student loans usually cannot be discharged in a bankruptcy.
The monthly payment on that car loan will have a negative impact on your personal debt to income ratio. Some lenders may try to tell you that they won’t double count your debts, but in this day and age, that is a very tough promise to make. As a result, double counting of shared debt is a very real problem, and one that should be avoided.