Huge mistakes we see people make...
Understand your loan payoff approach and stick with it. Read this article and understand if paying your loan off faster or paying less each month is right for you, then read the leading mistakes people make when they qualify for the Public Service Loan Forgiveness program.
Mistake #1 - Want PSLF but then pay more
They work for a public service qualifying employer, want to get loan forgiveness but keep paying more than their minimum payment each month. Listen...if you know you are on track to get your loans forgiven, do NOT pay more than the minimum.
Paying more doesn't pay off your loan faster, instead, it means you are literally throwing your money away. You are getting less of your loan forgiven. DON'T pay more! Save your funds and build up your savings, invest in retirement, or for a downpayment on a house. Do NOT put more towards your loans, if you want loan forgiveness. Also, paying more can get you in "pay ahead" status and invalidate additional payments you make during that time. It's vital you monitor your "qualifying payments".
Mistake # 2 - Do not file their paperwork
People want PSLF and only file the income-driven repayment form but never file the PSLF Employment verification form. They mistakenly think they will file the form at the end of year 10 and magically they will get all 120 qualifying payments counted and get loan forgiveness. The US Department of Education requires that the borrower prove their 120 payments were made while they worked for a qualifying employer. FedLoans will not track your 120 payments and graciously grant 120 payments if you did not file meticulous records and track your employers over the 10 years.
Harm - you are paying less with the IDR form, but are not getting your payments counted towards forgiveness. LoanSense has 100% accuracy of helping Public Servants get loan payments, they already made, counted towards PSLF. Let LoanSense help you!
Makes #3 - Refinance too early
People that work for qualifying nonprofits, refinance their student loans when they have no plans to leave their government or non-profit job. Imagine - you owe $100K from your master's degree in public health and get a job for the local government. Your payment is over $1000 a month. You refinance and drop the payment by $50 a month. Whereas, if you went on an income-driven plan, you qualify to drop your monthly payment to $600 and get almost $30K of loan forgiveness and no remaining balance after 120 payments.
This extra almost $400 a month could be building your savings for a house or other financial goals. Do not underestimate the power of the federal program to help. LoanSense's recommendation screen gives you the best "pay less" strategy.
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