Since ABC15's Nick Ciletti talked exclusively with Second Gentleman Doug Emhoff in April to learn more about the Biden Administration's latest plans for student loan forgiveness, he's gotten several e-mails from ABC15 viewers, asking him to follow up with their questions.
Nick got to work getting answers for several ABC15 viewers, including Jennifer.
Here's what Jennifer said:
"If we have a private spousal student loan will we ever be eligible for Public Service Loan Forgiveness? We have been paying for 10 years and if we had not consolidated into a private it would be forgiven. We have been told to consolidate and apply through the federal government and it is always rejected."
To answer Jennifer's question, we reached out to the White House directly to check back in.
Here's what a White House spokesperson told us:
"It would depend on what kind of loan she has. If she has a private loan, she's unfortunately not eligible. Federal programs are only available for Federal loans, ED-held loans, and generally commercially-held FFEL that are consolidated into the Direct Loan program."
Unfortunately, Jennifer doesn't qualify for any of the programs currently offered through the White House, but ABC15 didn't want to leave her hanging. Instead, we got to work, trying to find solutions to cut costs - and to do that, we reached out to the experts at Nerd Wallet!
Here's part of the conversation we had:
Nick Ciletti: I know we don't know the full financial picture and I know you can't give specific financial advice, but in general, when you hear Jennifer's question, what are some thoughts that come to your mind?
Nerd Wallet: ...When you talk about student loans, consolidation and refinancing are not the same thing. When you bundle your loans together and make them into one loan, that is a loan consolidation. If you do the same thing but you do it with a private lender, which sounds like what this viewer is describing, that is a refinance and that is a completely different animal. Once you have refinanced and you are in a private loan, — you are no longer eligible for programs like public service loan forgiveness. Other things like income-driven repayment plans are only available for folks who have federal student loans. So, unfortunately, for someone in this situation, they are no longer eligible for forgiveness.
Ciletti: What are some ways that they can still try to save?
Nerd Wallet: In terms of trying to save money, if interest rates have gone down since you took out the loan, you could try to refinance again to try and get a lower rate. If you currently have a private loan with a variable rate so it goes up and down with the market, you could try to refinance that to a fixed-rate loan.
Nerd Wallet also suggested checking out tools offered at https://studentaid.gov/. You can try out a simulator that gives you a better idea of what a payment could look like if you consolidate or refinance.
