Consolidating law school student loans Spy xxx chat
PAYE is designed to lower your monthly student loan payments, and thus you must have a to qualify for the plan.
The government defines the needed partial financial hardship as the condition existing when the monthly payment amount you would be paying under the Standard Repayment Plan exceeds the amount you would pay every month under PAYE.
The concept of student loan consolidation is simple: you apply for one large loan which will be used to pay off all your existing student loans.
That single loan will be easier to manage, because you’ll only make one monthly payment, and because it has a longer term than your old loans that payment will be smaller than the sum of your current payments.
The assistant is called the Financial Awareness Counseling Tool (FACT), and it consists of a series of tutorials based on information from your own government loans, using that information to create a personalized analysis of your financial situation and offer appropriate advice.
There are other requirements discussed on the linked page (you must qualify as a new borrower beginning in 2007, not all Direct loans can be repaid under PAYE), but there is one outstanding benefit: if you do succeed in meeting the criteria, you will keep your eligibility even if your financial circumstances improve, eliminating your hardship.
However, debt consolidation is sometimes a tradeoff, an exchange of easier payment terms for a more expensive loan, since you may pay more interest on the same sum over a longer period of time.
The ideal consolidation loan would be one in which you took advantage of a financial trend to secure a lower interest rate, or were able to do so because of your excellent payment history, without extending the term of any existing loan.
That is a circular definition, but nevertheless a clear one after the two amounts are calculated and compared.
Federal loans that are eligible for inclusion in the PAYE calculation are any Direct loans plus certain types of Federal Family Education Loan (FFEL or Stafford) loans, although no Stafford loans can be repaid using PAYE.