I’m a Retired Teacher and I’d Like to Lower My Parent PLUS Loan Payments

By on July 6, 2016
Interest rate negotiation can result in a lower interest rate than you are paying now.

Question:

Dear Steve,

I am a retired teacher. I was told that I could consolidate the parent loans I have and then get an income contingent repayment plan.

1. Does my credit need to be good to consolidate my loans
2. The article I read said a requirement is to be employed. Does that mean I can’t get the income contingent repayment plan since I’m retired.

Tina

Answer:

Dear Tina,

This should be a simple, easy, and free process for you. What you would first need to do is consolidate your Parent PLUS loans into a new Direct Loan and then select the Income Contingent Repayment as your payment plan.

Under the Income Contingent Repayment (ICR) payment your payment would be either 20 percent of your discretionary income or what you would pay over 12 years.

The term discretionary income trips many people up. Here is how it is defined, “For Income-Based Repayment, Pay As You Earn, and loan rehabilitation, discretionary income is the difference between your income and 150 percent of the poverty guideline for your family size and state of residence.For Income-Contingent Repayment, discretionary income is the difference between your income and 100 percent of the poverty guideline for your family size and state of residence.The poverty guidelines are maintained by the U.S. Department of Health and Human Services and are available at . ”

You can use the to get an idea what your new payment would be.

Here is how you can apply for a Direct Loan

You apply for a Direct Consolidation Loan through . This process offers both electronic and paper options. You can complete the electronic application as explained below or you can download and print a paper application from StudentLoans.gov for submission by U.S. mail.

Once you sign in to , you will be able to electronically complete the Federal Direct Consolidation Loan Application and Promissory Note. The electronic application on StudentLoans.gov consists of the following five steps:

READ  Obama Proposes Tax Help for Student Loan Relief. Congress Says No.

1. Choose Loans & Servicer
2. Repayment Plan Selection
3. Terms & Conditions
4. Borrower & Reference Information
5. Review & Sign

After you submit your application electronically via or by mailing a paper application, the consolidation servicer selected will complete the actions required to consolidate your eligible loans. The consolidation servicer will be your point of for any questions you may have related to your consolidation application.

It is critical that you continue making payments, if required, to the holders or servicers of the loans you want to consolidate until your consolidation servicer informs you that the underlying loans have been paid off.

Oh, and your credit does not need to be great to consolidate. In fact the Department of Education says, “Does my debt to income ratio, credit score, or employment status count against me? These factors aren’t taken into account when your credit history is reviewed. A lack of credit is not considered adverse credit.” As long as your current loans are not in default, you should be good to go.

morehelp1
Choice1 Choice3 Big Hug!
Euro-Video - , ,
If you have a credit or debt question you'd like to ask just use the online form .

Last step, fill out the information below or call us for Priority Assistance.

What problems are you having with your report?

Your first name is required. Your first name is required to be at least 2 characters. Your first name cannot be longer than 50 characters.
Your last name is required. Your last name is required to be at least 2 characters. Your last name cannot be longer than 50 characters.
Your email is required.
Your phone is required. Your 10 digit phone number is required.
Your state is required.
Your age is required. Your age must be greater than 18. Your age must be less than 100.

By clicking on the "Contact Me" button above, you consent, acknowledge, and agree to the following: Our Terms of Use and Privacy Policy and to receive electronic communications. We take your privacy seriously. That you are providing express "written" consent for Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS - charges may apply), even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list. Consent is not required as a condition to utilize Debt.com services and you are under no obligation to purchase anything.

By clicking on the “Contact me” button above, you consent, acknowledge, and agree to the following: (1)That you are providing express “written” consent for Lexington Law Firm, Debt.com or appropriate service provider(s) to call you (including through automated means; e.g. autodialing, text and pre-recorded messaging) via telephone, mobile device (including SMS and MMS – charges may apply), or dialed manually, at my residential or cellular number, even if your telephone number is currently listed on any internal, corporate, state or federal Do-Not-Call list; and (2)Lexington Law’s and and Debt.com’s Terms of Use and Privacy Policy. Consent is not required as a condition to utilize Lexington Law or Debt.com services and you are under no obligation to purchase anything.

About Steve Rhode

Steve Rhode is the Euro-Video and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

One Comment

  1. Steve Rhode

    July 6, 2016 at 11:03 am

    Tina, I just answered your question.

Share a Comment / Leave a Reply

%d bloggers like this: