Refinancing with Earnest
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Candidates make a lot of promises when running for office and President Donald Trump was no different. He laid out his vision for the future of America, including a plan to tackle the student loan debt crisis.
Tackling the student loan debt crisis is no small feat. Currently, there are 44.2 million Americans with student loan debt, totaling $1.41 trillion. The next economic crisis could burst the student loan bubble. In fact, the New York Fed has already sounded the alarm over mounting delinquencies.
As we approach President Trump’s 100th day in office, what steps has he taken to address student loans and what might be next?
Campaign promise: Cap income-based repayment at 12.5 percent
Right now, 10 percent of discretionary income is the cap for student loan payments under Income-Based Repayment. Trump’s plan proposes raising the cap to 12.5 percent, which would potentially raise your monthly payment under an income-based plan.
Status: So far, there has been no movement toward making this change.
Campaign promise: Student loan forgiveness after 15 years
Current income-driven repayment programs offer loan forgiveness after 20 or 25 years, depending on the specific plan. With Trump’s plan, forgiveness would come after 15 years for all federal loan borrowers. So even with the higher cap on payments, borrowers could come out ahead with earlier forgiveness.
Status: As of now, nothing has been done to change student loan forgiveness terms.
Administration action: Higher fees on defaulted student loan debt
In March, Betsy DeVos, the Secretary of Education, reversed a rule limiting the fees debt collectors could charge on defaulted student loan debt.
Under an Obama Administration rule, fees were capped at 16 percent of the balance. With this rule overturned, collectors can charge up to 40 percent of the balance. This could exacerbate the student loan debt crisis by increasing the amount of debt owed by already-struggling grads.
Administration action: Rollback on lender rules
Earlier this month, DeVos issued another rollback of rules from the Obama Administration. These rules required the Federal Student Aid office to take into account lender practices when renewing contracts. Student loan servicers were supposed to move toward greater transparency, inform borrowers of lower-cost options, and provide better customer service.
Now, there are no longer these contingencies placed on servicers, even as complaints against lenders are on the rise.
What’s next for Public Service Loan Forgiveness?
In October, the first of the Public Service Loan Forgiveness (PSLF) program recipients will apply for their discharges. The program is for those willing to work in government, non-profit, or other qualifying public service jobs for 10 years while making consistent payments on federal student loans.
This program is not something Trump has addressed directly. However, the Department of Education recently expressed its position that PSLF letters issued by FedLoan are not binding; it could rescind initial certification for an employer. Retroactive denial of payments made under the program is another possibility.
So far, the program hasn’t been repealed, though there is no guarantee the program is safe. PSLF is potentially very expensive. We won’t know exactly how things will go until October 2017, when the first of the program’s recipients can apply for forgiveness.
What can you do about your student loan debt?
At this point, the Trump Administration has yet to make the student loan debt crisis a high priority. Instead, the administration has focused on healthcare and tax reform. This week, the focus is on the budget negotiations to keep the government running.
Many borrowers would like to see an end to the student loan crisis with debt forgiveness and a federal student loan refinancing program. For now, however, you probably need to forge ahead on your own.
If you are worried about lowering your payments, you can still apply for consolidation and income-driven repayment. It’s also possible to apply for student loan refinancing with a private company.
Know your options when it comes to student loan debt. The more you know, the more likely you are to make an effective and efficient student loan debt repayment plan that works for you.
Interested in refinancing student loans?Here are the top 6 lenders of 2018!
|Lender||Variable APR||Eligible Degrees|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.89% APR (with Auto Pay) to 7.89% APR (with Auto Pay). Variable rate loan rates range from 2.47% APR (with Auto Pay) to 6.97% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of Month/Day/Year, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/21/18. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at firstname.lastname@example.org, or call 888-601-2801 for more information on ourstudent loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
APR stands for “Annual Percentage Rate.” Rates listed include a 0.25% EFT discount, for automatic payments made from a checking or savings account. Interest rates as of 11/8/2018. Rates subject to change.
Variable rate options consist of a range from 3.27% per year to 6.09% per year for a 5-year term, 4.64% per year to 6.14% per year for a 7-year term, 4.69% per year to 6.19% per year for a 10-year term, 4.94% per year to 6.44% per year for a 15-year term, or 5.19% per year to 6.69% per year for a 20-year term, with no origination fees. APR is subject to increase after consummation. The variable interest rate will change on the first day of every month (“Change Date”) if the Current Index changes. The variable interest rates are based on a Current Index, which is the 1-month London Interbank Offered Rate (LIBOR) (currency in US dollars), as published on The Wall Street Journal’s website. The variable interest rates and Annual Percentage Rate (APR) will increase or decrease when the 1-month LIBOR index changes. The variable interest rates are calculated by adding a margin ranging from 0.98% to 3.80% for the 5-year term loan, 2.35% to 3.85% for the 7-year term loan, 2.40% to 3.90% for the 10-year term loan, 2.65% to 4.15% for the 15-year term loan, and 2.90% to 4.40% for the 20-year term loan, respectively, to the 1-month LIBOR index published on the 25th day of each month immediately preceding each “Change Date,” as defined above, rounded to two decimal places, with no origination fees. If the 25th day of the month is not a business day or is a US federal holiday, the reference date will be the most recent date preceding the 25th day of the month that is a business day. The monthly payment for a sample $10,000 loan at a range of 3.27% per year to 6.09% per year for a 5-year term would be from $180.89 to $193.75. The monthly payment for a sample $10,000 loan at a range of 4.64% per year to 6.14% per year for a 7-year term would be from $139.65 to $146.76. The monthly payment for a sample $10,000 loan at a range of 4.69% per year to 6.19% per year for a 10-year term would be from $104.56 to $111.98. The monthly payment for a sample $10,000 loan at a range of 4.94% per year to 6.44% per year for a 15-year term would be from $78.77 to $86.78. The monthly payment for a sample $10,000 loan at a range of 5.19% per year to 6.69% per year for a 20-year term would be from $67.05 to $75.68.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
3 Important Disclosures for SoFi.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown.
All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.28% effective October 10, 2018.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.47% – 6.99%3||Undergrad & Graduate|
|2.57% – 6.97%1||Undergrad & Graduate|
|2.51% – 8.09%4||Undergrad & Graduate|
|3.02% – 6.44%2||Undergrad & Graduate|
|2.50% – 7.24%5||Undergrad & Graduate|
|2.79% – 8.39%6||Undergrad & Graduate|