AMA: Student Loan Repayment Plans, Forgiveness & How Do You Qualify

Student Loans: Student Loans Forgiveness, Consolidation, and More

Just in case you missed our AMA Student Loan Repayment video, we did a Facebook live video with the one and only student loan guru, Marques McBride.

He answered some of the most popular questions regarding your student loans, including Student Loan Refinance, Forgiveness and Repayment Plans.

AMA Student Loan Repayment: Your Basic Guide

Student Loans, Ask Me Anything Introduction

Nick: Hey everybody, welcome to episode one — Student Loans, Ask Me Anything, with Marques McBride and Nick Bentley. I am Nick Bentley, and I’ll be your host today.

What you’re about to hear is an ask me anything about student loans recording from July 26, 2017. Now, this is our inaugural episode and we’ll be here weekly to help student loan borrowers with their questions about lowering their student loan payments. Enjoy.

Nick: All right guys, welcome. Thank you for joining us today. This is the very first, inaugural, Facebook Live, for the US Student Loans Center.

Let me introduce myself, my name’s Nick Bentley. I am in the marketing department over here, I oversee all that, but the most important person here today — and guys if you could comment or give us some like or some love if you can hear me; want to make sure that everything is working fine — but who I want to introduce you to today is Mr. Marques McBride.

So, Marques is the number one champion of student loan debt here at the US Loan Center. And that’s a fancy term for basically the guy that knows everything about student loans. How they affect you, how you can qualify for a student loan forgiveness. What you can do, to put yourself in a better situation financially with your student loans, with the repayment status.

So we actually, we sent an email to quite a lot of people. We got a lot of responses so I’m going to read some of these as they come in, but before I do that I kind of want to tell you guys who we are, why we do what we do, and why we decided to do this Ask Me Anything, because I think it’s important.

First of all, we are the US Student Loan Center, and we specialize in helping people lower their student loan payment. And the reason why we do this is to help people navigate through the red tape of the government repayment program.

When you graduate with student loan debt, you’re left not knowing a lot about the options out there. There’s a lot of talk, Marques, about forgiveness, and, “what happens if I default, can I come out of it”, and all these different questions that you’re just not told.

I mean, you talk to hundreds of people every day about their specific situation. And one of the most prevalent things that come up is forgiveness.

Marques: Yes. And it’s a sad thing because forgiveness has been available all the way since 2007.

There’s been a lot of repayment plans that have been available to people that they could have taken advantage of a long time ago and they’re just now finding out or just now hearing the craze about loan forgiveness when it’s been available the whole time. And they’ve been missing out on a lot of valuable time, man.

It’s just a sad thing, and that’s why we’re here. To take advantage of those programs that are already available through the department of education to get you guys on them. And we do it for you to make sure that you get on there and you get the lowest payment possible. And we see you all the way through until the loans are forgiven.

We are those advocates.

Nick: So just to give you guys an idea of who Marques is and what he deals with, we help hundreds of people every single day.

Marques — his job is to make sure that the payment actually gets lowered and it’s actually accepted by the department of education and that you’re put into a better situation. So I couldn’t have a better person here to answer the questions that you guys have been asking so much.

And just to kind of circle back to loan forgiveness, you said that it’s been around since 2007.

Marques: It’s been around.

Understand Loan Forgiveness

Nick: Now I don’t want to confuse people but there’s a lot of terms like “Obama student loan forgiveness.”

Is that the same thing? How does that work it’s just a lot of confusion out there that we’ve got a lot of questions up right now.

Marques: Yes and I can understand how they can associate it with Obama because that’s when he introduced one of the newer payment plans called Revised Pay as You Earn. But ever since then it’s been available. There’s a couple of different payment plans that are not the lowest, but still, you are eligible to be on their loan forgiveness.

But really when everything kind of just got popped off and in the media was when Obama was in office and he made out that new repayment plan. And that’s when people started talking about it. But the sad thing is it’s been available before.

Nick: Gotcha. OK, so it just kind of came into popularity. But I don’t want to… Obama is not here to forgive your student loans. That was the term that probably someone in the media gave him. But loan forgiveness is a real thing, but there are specific qualifications needed, right Marques? To fall into those programs so can you kind of walk us through the general — – and then I’ve got a bunch of questions here that are specific about that that I can get into that. So let’s talk about what it is — general.

Marques: OK. Generally, what is the loan forgiveness is exactly what it says. Your loans will be forgiven if you meet particular criteria.

Nick: That means written off; don’t have to pay them again.

Marques: Never seeing again, you’re totally debt free when it comes to federal student loans . . . [inaudible] It is what it says.

Nick: So who qualifies?

Marques: Everybody that can get under an income-driven repayment plan qualifies for loan forgiveness. There’s a couple of different ones that help you get there quicker. For the average person…

Nick: What’s an income-driven plan? Let’s make sure that — because there’s income-driven, then there’s standard, and then there’s rehab and all that stuff.

So income-driven is a specific type of repayment plan that you go into upon a consolidation.

Marques: Yes.

Nick: So when you graduate from school, you don’t fall into that. Correct?

Marques: That’s correct.

Nick: So let’s walk through that process.

Marques: So when you graduate from school, you automatically get placed on a standard payment plan. All it is is just you’re working toward paying the loan off with the interest — that’s what it is.

Now, in order for you to get under something that’s based off your income and family size, that is what we’re talking about. We’re going to get your payment plan based on your income.

Nick: So when you graduate from school, you are not put into a plan that you can qualify for forgiveness.

Marques: Not at all. They set you up to just pay your loan with your hard-earned cash.

Nick: That’s crazy.

Marques: Yes.

Nick: So they don’t really, like, set you up for anything to help you. So that’s why consolidating and going through the process of restructuring those loans into an income-driven plan… OK, so now we know we’ve got to be income driven, which is through the process of consolidating those loans.

Marques: Yes. You’re taking the power back into your hands. You’re automatically thrown into that standard and saying, “Hey, pay this bill monthly; we don’t care what your expenses are; this is what it is because this is the money that you’re borrowing.”

But you’re taking back the power by saying, “Hey this is where my income is; this is my family size.” They have to calculate a payment based off of that.

Careers that Qualify in Income- Driven Plans

Nick: OK, so there’s a bunch of different factors that come into play, but I know one of the most popular questions that we get on our blog and on the phone with everybody here is: what about careers? Because there are certain specific careers that qualify underneath these income-driven plans.

Marques: Yes.

Nick: So, let’s list of the top four or five.

Marques: OK. So If you work for a non-profit organization, state-driven type of job, or any entity of the government, the loans get forgiven quicker. It’s a quicker process. Really it’s after 120 payments, which is ten years.

Nick: I don’t want to do math publicly. Ten years, right? [laughs] So ten years. So for non-profit.

Marques: Yes, for non-profit. Yes.

Nick: What about nurses and doctors and teachers.

Marques: A couple of those other —

Nick: Professionals.

Marques: Professional degrees is what it’s called. Chiropractics, law, doctors, and things of that nature. It actually takes longer. It’s twenty-five.

Nick: So you can be a doctor and graduate. I think the average doctor right now graduates around $140,000 in debt. You can pay on that loan for twenty-five years and then it goes away.

Marques: It goes away.

Nick: The government basically subsidizes the remaining balance of that loan.

Marques: Exactly. All you have to do is remain under that payment plan that is based on your income and family size. You are good to go.

Nick: I got a couple questions in coming in here. “I have worked 21 years as a drug and alcohol counselor. All of this has been at non-profit organizations. Is there any way I can have my loans forgiven?” This is perfect. It is what we’re talking about.

Marques: Yeah. He can, and was qualified for public service loan forgiveness, as I was saying. Which was the non-profit and thing of that nature, which can be forgiven after ten years?

But the sad thing is if he was not under one of those payment plans that was based on his income and family size, those 21 years have been kind of lost. He’s been paying towards his loans, faithfully more so, and it was just going towards the balance. But he could’ve, in all reality, had the loans forgiven half of the time he was working at that place.

Nick: Gotcha. Wow. So…

What I want to do right now is just take a quick second and if you think your loans might be eligible for forgiveness… A lot of you guys know who Katie is. She is the one that has been communicating with you guys. She’s super, super-intelligent and knowledgeable about student loans and situations as well. She is actually working the tech side of things today for us, with all of the tools and resources that she gives you on a daily basis. She’s going to put in a link here that you can go to chat with somebody about your specific situation because you kind of hit on it — everyone’s situation is different. It’s based on, I don’t even know how many factors, but…

Marques: So many strategies that you can get under the lowest possible payment plan based off of your situation.

Nick: OK. So we know public loan forgiveness. So the guy that was asking us about 21 years as a drug and alcohol counselor at a nonprofit. The 21 years would be worth nothing unless he fell under an income-driven plan.

Marques: Yes.

Nick: So the first step would be make sure you’re in an income-driven plan, and then make sure you’re enrolled in the program. And there’s something that has to happen every year, right, to make sure that you stay in there.

Marques: Absolutely.

Nick: Can you go through that?

Marques: Absolutely. So once you get qualified for a payment plan that’s based on your income and your family size, they set you with a payment. And that payment is only good for twelve months at a time. So they have to verify your income each year. You could be working at Walmart one day, and then tomorrow get hired making a hundred thousand dollars at some big company. The Department of Education wants to know that. “Hey, OK, you were making this, OK, how much are you making now?”

If you’re making that much, you more than likely can afford to pay off your student loans. So the Department of Education wants to keep tabs, so you have to re-certify each year, after every twelve months, to stay…

Nick: And it’s basically to make sure that… It’s an income-driven plan, so if you start making more, the government is going to want to get back more. And it kinda makes sense, I mean, it’s like with any loan that you take out. If you can afford to pay more than your payment, it lowers your effective interest rate over time. So it’s kind of the same thing there.

I’ve got a question coming in. Guys, we’re live right now, so if you have live questions, I’d love to answer those for you. But I’ve got one coming in now that says, “With the Teacher Loan Forgiveness if I need to do a hardship deferment for a couple of months, will it hurt my opportunity for loan forgiveness?”

So let’s explain what deferment is, because everybody qualifies for a short period of time, right?

Marques: Yes. So you can always put your loans in a deferment if you’re going through some sort of hardship or unemployment, or things of that nature. But it’s something that you have to submit over, you know, to whoever’s handling your loans, be it a FedLoan, or what have you. It’s a hold on your loans — so that there’s no amount that’s due for a specific point of time. And they’ll let you know.

Nick: Does the interest rack up?

Marques: The interest does.

Nick: It does when you’re in deferment?

Marques: Yes.

Nick: OK.

Marques: Now, but the bad thing is in this particular situation, remember how we were telling you guys that once you’re income type of repayment plan, it’s however many payments are on file and the loans are forgiven. Right? But if your loans are on hold, there are no payments that are happening. So you’re kind of losing that time.

Nick: So you’re kind of losing that credit.

Marques: Exactly. So it’s going to take you longer to get to that loan forgiveness.

Nick: So you don’t necessarily lose out on the opportunity for those to be forgiven.

Marques: Takes a little longer.

Nick: It just takes a little bit longer. So it’s 120 not months, but payments.

Marques: Exactly. On file.

Nick: So, if, how long can you go into deferment?

Marques: When it, I’ve seen people go into deferment for actually years, or for a lot of months too as well. Forbearance is different. You only have thirty-six months of forbearance time. But deferment — as long as you can prove a hardship to whoever is handling your loans, which is the servicer — then they’ll grant it to you.

Why can’t Federal and Private loans be Consolidated Together?

Nick: OK, alright, cool. I’ve got another question coming in here. I’ve heard mixed messages about consolidating student loans. Why can’t federal and private loans be consolidated together?

Marques: Well, that’s really good to ask.

Nick: So this is probably something that you discuss on a normal basis because a lot of people do. They have private student loans, which would be maybe through a bank or private investor, some type of situation like that, and then federal student loans, which the government backs.

Marques: Exactly. Consolidation, when it comes to federal consolidation, is all coming from the Department of Education’s funds. So they’re handling and servicing and collecting the funds that were dispersed through them. So if you get it from a private lender, then they don’t have any association with the Department of Education. It’s just like that you went to get that car financed at Toyota. Toyota doesn’t have any association with the Department of Education itself.

Nick: Gotcha.

Marques: They can’t merge the two.

Nick: OK.

Marques: So a lot of times people have private loans through servicers of the Department of Education. All that is is — whatever you qualify for when it comes to your financial aid and things of that nature when you took out the loans — whatever was left over that you needed assistance, they gave you, from them personally, the funds needed to make up the difference.

So whatever that difference was that they made up, it’s really owed to them. It’s just like they gave you a favor, “OK, this is between me and you”.

Nick: So it’s a separate note, essentially.

Marques: Exactly.

Nick: All right, gotcha. So, when you’re in school and you acquire these student loans, when you graduate, are they all the same loan or are they multiple loans?

Marques: That’s the crazy thing, too, that a lot of people get confused on. Some people go to school for a period of time and they only have one servicer. Everybody knows Sallie Mae, you know, they’re familiar with that, so let’s just say that —

Nick: So the servicer is the person that actually owns the paper, right? Owns the note. They’re due to the money.

Marques: Exactly. Where you’re getting that statement from, of your monthly payment, that’s your servicer.

Nick: So the Department of Education, which is a US government entity, basically brokers out your paper for other people to collect on it. Is that accurate?

Marques: Yes, they have separate companies that work for them to collect on their debt.

Nick: So that’s kind of why you can’t have federal and private loans consolidated together.

And just so everyone’s on the same page here, and we don’t have a lot of questions about consolidation, can you explain what a consolidation is and why it’s beneficial? Because there’s a lot of consolidation questions coming up and I want to make sure we got that covered.

Marques: Yes I see that.

So really, very simply, a consolidation is you’re taking multiple loans or other loans and you’re putting them together as one. You’re having one loan, one interest rate, and one servicer.

Nick: OK.

Marques: So when you consolidate that… Say for instance you have multiple loans with different interest rates, they’re all growing at different intervals, one faster than the other, and one higher than the other.

When you consolidate, you just have one interest rate that’s actually going to be a medium of all the different interest rates. And then you have other repayment plans that are available to you.

Nick: So let’s say we’ve got a $5,000 loan and then a $2,000. So the 5,000 is at six and a quarter, the 2,000 is at five point five. If I were to consolidate those two, it would basically be the average of that interest rate on the total $7,000.

Marques: Exactly. And you’ve got to think about it, some people have twenty loans, fifteen, and they’re all kind of growing all over the place. You want to tame them by consolidating them into one, and this is another thing, some loans are not eligible for loan forgiveness.

What Type of Loans Wouldn’t Be?

Nick: OK, so which loans? What type of loans wouldn’t be?

Marques: Yes, there are particular kinds of loans that are called, it’s called a FFEL. It’s a federal, family federal educated loan.

Nick: OK.

Marques: Those type of loans cannot be forgiven. You have to have a direct loan. Which is coming from, directly from the Department of Education, is what it says.

Nick: OK, so if you wanted to find out what types of loans, what’s kind of the process that you go through to help people like that to find out?

Marques: Yes, so when you guys call in, we have the number too, as well. We can pull up your individual situations. We can pull up your loans. There’s a government system that we can see exactly what type of loans you have.

Now if we see that you have those type of loans, we will consolidate those loans so it can turn into a consolidated loan that’s eligible for loan forgiveness.

Nick: Gotcha. So… Just to go back to my example real quick, the $5,000 loan and the $2,000 loan, I have to make two payments.

Marques: Exactly.

Nick: It would be two separate payments from my bank account, right? So if I consolidate, that brings it to only one for me?

Marques: One payment, one place.

Nick: So I could go from 20 payments to one?

Marques: Exactly.

Nick: Got you.

1. Let’s see here. “Is it good to consolidate all the loans together, or pay them separately?”

Marques: Exactly what we’re dabbling into. It’s best to pay all just one payment because we can get that one payment as low as possible.

You have different servicers like we were talking about before with different interest rates, but you want to have it all in one place, one payment.

Absolutely. Gets all crazy.

Nick: Can you ever… And it’s easier to default.

It’s easier to miss them, right, if you’ve got 20? So — “can you ever forbear loans that are consolidated, or are you bound to repayment immediately after going through the process?”

Marques: Absolutely, you can forbearance. You have 36 months of forbearance time to use that.

What’s Forbearance and Who’s Eligible for It?

The federal government makes it too easy to get a student loan forbearance: 68% (!) of borrowers who entered repayment in 2013 got one. https://t.co/egIVwdjQo1

— Preston Cooper (@PrestonCooper93) May 2, 2018

Nick: What’s forbearance and who’s eligible for it?

Marques: Yes. Let’s compare it to deferment. Deferment you have to prove a hardship. “Oh I’m going through this, and this and that.” Right? Forbearance is entitled to you. You can ask to be placed on forbearance without any questions and you’re good to go. It’s the same thing as a hold on your loans but you don’t have to apply for it. It’s due unto you. You have 36 months to use at your disposal at any given time.

Nick: For any reason?

Marques: Any reason.

Nick: OK. That’s very generous. I wish… [laughs]

Marques: You want to buy that new TV, just place it on forbearance, you know. [laughs]

Nick: I wouldn’t recommend that. We’re going to be in big trouble if everybody does that.

The point is you can do it for whatever you want. That is the government rule; 36 months you don’t have to pay. Now, do you have to submit paperwork? Or how do you qualify for that?

Marques: Yes, you can do it without paperwork. You can do it over the phone. But, when you do it over the phone, you can only do three months at a time. If you send in the paperwork, you can do 12 months at a time.

Nick: OK, Cool. I have a comment coming in here: “I’ve been talking with Sallie May and Naviant for seven years, to no availability.” This is something that I know you see come up a lot, is working with servicers… They struggle with dealing with the number of clients that they have, which means they don’t give you good customer service. But there is also kind of a back-end motivation for them.

Do you want to hit on that for a second?

Marques: It’s much deeper than that. Ultimately the goal of these different servicers, which is companies that are hired to collect on your debt, they are essentially like collection agencies, if you will, unofficially.

But their goal is just to collect on a debt. They’re not trying to get you on a zero-dollar payment because if they get you on a zero-dollar payment, or something low, they’re losing money. They’re paid to collect, so if they’re not collecting, they’re not on to it.

So it’s easy for them to turn you this way or turn you that way, put you on hold for a long time and not answer the phone because all they want to do is send you that statement each month. And if you don’t pay that statement, that bill, they want to default you.

You have to understand the motives of the Department of Education and understand the motives of these servicers. They are trying to collect on a debt. They are not really trying to see you have loan forgiveness.

Nick: I don’t want to throw any servicers under the bus, but there are some that are better than others. We have helped enough students through this process to know who has the best interest and who doesn’t.

But if I understand correctly, the government issues the debt, they hire these companies to collect, and only collect, not to put me in a better repayment plan based on my income, my family size, my demographic.

Marques: Yes, they just want to collect. Now they put it on you, it’s up to you to try to find a way to get the lowest payment possible. You know, really, personally, though, I think that if they really cared, they should implement some sort of curriculum while you’re in school.

Nick: Sure, we don’t know. You graduate, you don’t know. So they put all this on you.

And this is the other thing, you can consolidate by yourself, right?

Can You Consolidate by Yourself?

Marques: You can, you can do this. And the bad thing is, a lot of people don’t know how. That’s the sad thing about it.

Nick: Well, if I understand all the complications and the loans, and the interest rates, and the servicers, and all the different types of repayment plans — it kinda sounds like the same thing, like you can do your own taxes, right?

Marques: Yes.

Nick: But you don’t know if you’re gonna have all the deductions that are gonna give you highest refund check. So, that’s kind of how we help — is we walk them through this process. And for everybody watching right now, if you’d like more information on the process and what it looks like for you. A lot of people don’t know, Marques, that they qualify for these things. Like the gentleman who has worked 21 years, and he could have been in a loan forgiveness… Those could have been gone by now.

Marques: He could have been debt-free right now as we’re talking about it.

Nick: So what I would encourage you to do is, there’s a link in the chat right now, that’s going up, that you can go and speak with somebody, that will walk you what’s called our, really, our three step quoting process. Which we basically pull your loans through our proprietary quoter, which is a software that we use. And it spits out all the government payment plans. And it basically tells you what you’re eligible for. If you’d like to move forward with that, that’s fine. If you’d like our help, we can do that, too. But whatever works best for you. Our number one job is to help people kind of navigate this system, and get through the red tape, and figure all this stuff out.

So I want to put that in there. But I’ve got some more questions coming in. “If I return back to school for my Masters, do I have to pay my loans?”

Marques: When you’re in school, you’re not entitled to have to make a payment towards your loan. It’s called an “in-school deferment”. Your loans will be on hold.

Nick: Which is different from a regular deferment?

Marques: Oh yeah, it’s different, it’s nothing you have to apply for, because your school sends a code, letting your servicer know that you’re in school. So no payments while you’re in school. But when you come out or you graduate, you have a certain span of time called a grace period that you don’t have to make any payments. They give you that time to just get a job — you know what I mean? — get on your feet, and then they will start sending you the statements shortly after.

Nick: So, how long is the grace period?

Marques: Grace period is ninety days.

Nick: Ninety Days?

Marques: Yes.

Nick: Is that for undergraduate and postgraduate?

Marques: It’s all the same.

Nick: It’s all the same, OK, alright. Got another question — “My father is listed as a cosigner on my private student loans. How can I take him off so that I have the sole responsibility?”

Marques: Right, so once your parent signs over or cosigns for a loan, it’s really no way out.

Nick: OK.

Marques: It’s just as simple as if they sat down and went to school themselves.

Nick: Gotcha, so there’s no way that you can kind of refi and get them out of that or consolidate and get them out of that?

Marques: No.

It’s literally the loan is taken under their name, their social.

Nick: OK cool. So we’ve got another question coming here. “What about if I refinance with my loans to get a lower interest rate? Will this erase my years of going towards forgiveness too?”

So, this question’s about refinancing. But what’s the difference between refinancing and consolidating?

What’s the Difference between Refinancing and Consolidating?

There is a right answer…. and it depends…

Should you #refi student loans?https://t.co/WcuUN3GYsB

— Josh (@moneylifewax) May 6, 2018

Marques: Really, I think the term that she meant was consolidating because it’s kind of essentially the same thing. That’s the only real way that you can kind of refinance it under a different kind of a term.

Because when you consolidate, the terms are longer.

Nick: So refinancing is kind of restructuring the loans, consolidating is throwing them in and turning them into one and consolidating — it may or may not help your interest rate. Is that an accurate statement?

Marques: It actually absolutely will. It will help your interest rate 100% because it’s a weighted average of all the interest rates of all the different ones that you have. So it’s going to be a medium and it’s going to be lower. It’s not going to ever be that high.

Nick: Gotcha, so it’s different from a mortgage refi?

Marques: Yes, absolutely.

Nick: We got a lot of questions here about private student loans — “Can you consolidate your private loans and how is that process different from federal loans?”

Marques: You cannot consolidate private loans because those private entities, they go by their own rules.

Nick: So if you’ve got Discover and Bank of America, for just a general example, you can’t consolidate because they’re held by two different financial institutions?

Marques: Exactly, very simply. Very simply.

Nick: You can go through a process of lowering those somehow though, right?

Marques: There is a process that you can lower it. We do have a particular team that works with private loans, credit repair and stuff like that, and they dabble more into that. But as far as all of the benefits that come with federal loans, like loan forgiveness and income-based stuff, it’s actually out of the window.

Nick: So if you have private student loans, no forgiveness?

Marques: No forgiveness. Because public service… Who’s forgiving the loans? The Department of Education.

They’re not gonna pay if you borrow money from your mother.

Nick: That’d be nice. My mom would appreciate that.

Alright guys, let me see if I got anything else coming in here. I think we, I mean we answered a lot of questions, Marques.

I know that there’s a lot of confusion, guys when it comes to student loans, which is why we want to start doing this. We’re gonna do this every Wednesday. We’re gonna see what time works best for you guys, so we’ll be available for you. This was our first one, we had a lot of fun doing it. There were a lot of questions that came in, and what I did was, I tried to consolidate the general themes of the questions, and kind of, bring them into one.

But again guys, if you’ve got student loans, and you’d like to chat with somebody about what you’re eligible for, I would encourage you to check out the link in this video and chat with somebody. I think it takes like ten, fifteen minutes. You can find out what your loans are, what the rates are, and what your payment could be.

Marques: It doesn’t take long at all.

How do I Qualify for a Zero Dollar Payment?

Student Loan Relief Approved Client / See New Zero Dollar Payment https://t.co/nAvO0MZFDG #studentloans pic.twitter.com/JRIAJyvie4

— Paul J Paquin (@PaulJPaquin) July 24, 2014

Nick: Now I got one more question coming in before we go. “How do I qualify for a zero dollar payment?”

Marques: Oh yeah…

Nick: So this is a popular question one, I know you…

Marques: Yes, that’s the goal. You . . . [unintelligible] zero dollar payment because that’s actually counting as payment going towards the loans being forgiven.

Nick: So a zero dollar payment is counting towards that forgiveness?

Marques: Exactly. They will literally send you a statement in the mail, and the total amount due for that month will say “zero dollars” —

Nick: How do you qualify for that?

Marques: It’s based on your income and family size. So you send over your pay stubs, or your proof of income, which can be your 1040 from your most recent tax return. There are other proofs of incomes that you can use, too, as well. You know, we have like different strategies that we use to get you the lowest, but, when you send that over, there’s an application that has to be filled out to the tee — to get you under the right . . . [inaudible]

Nick: It’s a long… it’s a big stack.

Marques: It’s a phone book or whatever, but if you can get through that phone book and you fill it out a particular way, they will send you a letter letting you know the results of that application, and that based off your income and family size could qualify for a zero dollar payment.

Nick: Cool. So let’s talk a real-life example. I don’t want to stick you to something but give me an example of somebody who may qualify for a zero dollar payment.

Marques: Somebody who is unemployed; they have no job. Somebody with a very low income.

Nick: Are we talking less than 20 grand?

Marques: I want to say less than 20, and remember family size is taken into account too.

Nick: So when you say family size you mean people living in the same house?

Marques: People in your household, yes. People that you support.

Nick: So if you and your spouse combined make less than twenty grand and you got two kids, that’s something where you would qualify.

Marques: Oh yes — sounding like a zero.

Nick: There would probably be other things to make sure that you could live if that was the situation.

But what about a single mom who is making forty grand a year with two kids.

Marques: Single mom, forty grand, two kids — I don’t see it as a zero dollar payment. It’s probably going to be like a 70 or 80 —

Nick: A smaller payment.

Marques: It’s going to be small.

Nick: If you were to, let’s say — there are so many different situations, guys. I don’t want to pin them on this but I kind of want to give you at least a general idea of where you may fall.

If you are that person and you don’t qualify in one of those careers. When you exit school, under a standard plan and you said that you could probably qualify for a 60 or 70 dollar payment. What do you think that the payment could be at a standard plan without consolidating?

Marques: Because it is based off your loan debt, so the more you have when you are under a standard, the higher the payment is going to be.

Nick: Let us say the average student loan borrower graduates with $32,000 in debt.

Marques: 32, you are probably looking at a high 200 or maybe 300-something dollar payment.

Nick: So it’s a couple hundred bucks that you can go through during the process of consolidating.

Marques: And probably have a zero, or probably 50.

Nick: Smaller payment.

Marques: Absolutely.

Nick: A lot of people just don’t know this. I have been in the business a long time and I don’t know some of these things. [laughs]

Marques: [laughs]

Nick: That’s why we got Marques here to answer all of the questions. Again, guys, here answering these hundreds of times a day, and we’d love to have the opportunity to walk you through the process, but unless there are any more questions that pop in, guys, we’re going to hop off.

What we’ll do is — we have this recorded right now, so we’ll throw this up on our Facebook page and we’ll send it out to everybody, but if you any more questions, guys, feel free to email us or go to our website and chat us.

You can call us. Our direct line is 813-775-2058. You can call us at any time if you have any questions. And hopefully, Marques will be the one helping you out because he will not lead you in the wrong direction. [laughs]

Marques: [laughs]

Nick: Alright guys. Thanks.

Marques: Alright, see you.

Nick: See you guys next week.

The conversation end here but we hope this AMA Student Loan Q and A has enlightened you with your questions about different repayment programs.

Check the full video to see it in action!

Have you watched our AMA Student Loan video? Share your comments below.

Up Next: College Loans Guide | Your Key Guide to Student Loans

This post has been originally published on July 26, 2017, and has been updated for quality and relevancy.

The post AMA: Student Loan Repayment Plans, Forgiveness & How Do You Qualify appeared first on US Student Loan Center.