Student Loans in the News: Pros & Cons to Credit Union Loans
A brief round-up of recent articles and blog posts that discuss current student loan debates and data
About the author: Kevin Mahoney, CFP® is a Millennial financial expert and fee-only financial advisor in Washington, D.C. Kevin's work with his clients focuses on paying off student loans, buying a house, investing savings, and budgeting. Kevin is the founder & CEO of Illumint, a virtual financial planning firm specifically designed to help couples and young families with their financial decisions.
6 Major Pros and Cons Before You Borrow Credit Union Student Loans
Student Loan Hero
Author Christy Rakoczy writes:
"Big banks typically operate in nearly every state, and almost everyone has heard of them. But with local credit unions spread across the country, finding the best deal on a loan can be a big challenge.
To complicate things further, not all credit unions will offer the kinds of loans you’re looking for. Some credit unions don’t offer student loans at all. Others might limit loan options to undergraduate students, or only offer refinancing loans.
However, services such as LendKey and Splash Financial (refinancing only) allow you to shop for loans among many different community banks and credit unions. This streamlines the process and makes it easier to find a credit union to borrow from. You could also check out this list of nationally available credit union student loans as you start your search."
[Read the entire article over at Student Loan Hero]
Not all student loans qualify for forbearance under the CARES Act. Here are the ones that do and don't.
Author Laura Grace Tarpley writes:
"You might have a Federal Family Education Loan (FFEL) or a Perkins loan. Some FFEL or Perkins loans are held by the Department of Education, and those are eligible for forbearance.
However, some Perkins loans are funded through colleges, and some FFEL loans are funded through private companies. These do not qualify for forbearance under the CARES Act.
David Klein, CEO of private student loan lender CommonBond, said there is a general rule of thumb for figuring out whether your FFEL loan is held by the Department of Education.
'The way it generally works is that if you have a federal student loan from before July 1, 2010, then it's likely not held by the federal government,' Klein said. 'And if you have a federal student loan that was originated after July 1, 2010, it very likely is held by the federal government. The heuristic here is if you got a loan originated after July 1, 2010, then you get the federal relief that's the effective six-month moratorium through September 30.'
If you aren't sure whether your FFEL or Perkins loan is held by the Department of Education, contact your student loan servicer to find out."
[Read the entire article over at Business Insider]
DC student loan borrowers affected by coronavirus could see some relief
Author Abigail Constantino writes:
"Those who live in D.C. and are struggling to pay student loans due to the impact of the coronavirus crisis could see some relief from payment and collection.
D.C. Mayor Muriel Bowser announced Friday an initiative that gives expanded financial relief options to residents paying private education loans — such as commercially-owned Federal Family Education Loan Program loans or other privately-held student loans.
The initiative, launched in the District and several states including Virginia, will give qualifying D.C. residents loan forbearance and other protections.
Providing a minimum of 90 days of forbearance
Waiving late payment fees
Ensuring that no borrower is subject to negative credit reporting
Ceasing debt-collection lawsuits for 90 days
Working with borrowers to enroll them in other borrower assistance programs, such as income-based repayment.
The new initiative fills a gap not covered by the federal CARES Act, which provides relief for those with federal loans but not borrowers whose loans are not owned by the federal government.
Student loan services that are not able to provide relief should work with loan holders to relax restrictions or obligations, the mayor’s office said in a statement."