Interviewer: Good morning and welcome to South Florida weekly and we happen to
have the government shutdown. The government not having to pay its bills but if
you have a student loan you still have got to pay your student loan even if you
file for bankruptcy you still have to pay it. Joining me today now is an expert
on student loans, Bruce Mesnekoff. He is a nationally recognized expert in
student loan management and consolidation. He is a manager for the student loan
help center, has developed and implemented programs which have enabled thousand
of borrowers to retake control of their previously manageable student loan debt.
Welcome to the show.
Bruce: Oh hello Karen, how are you today?
Interviewer: Very good thanks for joining us. And you also work with nonprofit
financial assistance organizations around the country to ensure consumers are
made aware of the newest programs and solutions available for their student loan
issues right? Tell us about the nonprofits.
Bruce: Well, the nonprofits are a great thing. If you are an employee of a
nonprofit, a company that is a nonprofit, or if you are an employee of any
federal or local state government agency, and that includes teachers at public
schools, or anyone who works at the schools or hospitals, fireman, policeman so
on, then there is some great forgiveness programs out there. In particular, the
public service loan forgiveness program that can help you get a large part of
your loans forgiven.
Interviewer: Wow, that is wonderful. Can you explain how that works, you work
for 10 years and last month the consumer protection financial bureau created a
toolkit for employers like nonprofits, school systems, police, fire departments,
to help make their workers aware of what they might be eligible for. The public
service program allows those with high student loan balances relative to their
income to have that balance of their loans canceled. How does that work?
Bruce: Yeah, you know what that’s great that they put a toolkit out there,
because so many people who do qualify for this program are not aware of it, they
don’t know about it so they don’t take the necessary steps, and you don’t get
the money forgiven. But the way it works, the specifics are you need first of
all to consolidate your loans into the department of educations loan
consolidation program. It’s a fantastic program and it offers what’s called a
income-based or income contingent repayment plan which you need to be on to be
eligible for this forgiveness program. And what that does, these income based
plans, they ensure that you get an affordable payment for the lifetime of your
loan. Because your payment is not based on how much money that you owe, it’s
based on your discretionary income, and how much you can afford to pay. So each
year, your payment could go up or down a little bit depending on your financial
situation. So, you enroll in this consolidation program, get on an income-based
payment plan, which usually will provide for a much lower payment than you
currently have, you make payments for 10 years, just be sure to make them all on
time don’t go behind, and after 10 years whatever your balance is left, your
principal interest everything, that’s completely forgiven and it’s 100%
tax-free, that forgiveness as well.
Interviewer: So this is federal government workers?
Bruce: Yes, this is federal government workers, anybody who works for any branch
of government, federal state, local, or for private companies which are called
501 C3’s, nonprofit companies.
Interviewer: Okay so if you’re a federal government worker we have got a
shutdown right now, your income is zero, so you don’t have to pay your student
loan now. It is just a symptom of the time. But what happens if you have been
forgiven this debt and it is many thousands of dollars do you have to pay income
tax on that debt canceled under the public service program?
Bruce: there is no income taxed obligation that you have. It is completely
tax-free, which is another great benefit, because people are getting tens of
thousands of dollars, and in some cases over $100,000 will be forgiven for some
people in this program. So, the fact that they do forgive this tax-free is a
Interviewer: So is this true even if you went to a private school, like
university of Miami? I mean it doesn’t matter where you went to school?
Bruce: It does not matter where you went to school, the only thing that does
matter is that your loans are federal loans, this is not eligible for those who
have private loans. If you took a loan out through Wells Fargo, that is not a
federally backed loan for instance, your federal loans can be forgiven, but not
your private loans.
Interviewer: Okay, and the private loans, do they have more of a higher interest
Bruce: Yeah, on private loans they generally have a little bit higher of an
interest-rate, because private loans when they are given to people, are based on
their financial situation, credit, and so on which can vary from person to
person. And there is a lot of different types of loans that people may have out
there in the private world as well. The federal loans are all at the same rate,
they don’t discriminate against credit, employment, you can have bad credit,
great credit, no credit you could have a job, no job, it doesn’t matter when you
get the federal money it’s all the same to everybody who gets it.
Interviewer: now is FAFSA a loan or is that a grant?
Bruce: FAFSA is a loan, that is a student loan form that you fill out to get
your what they call title for money, your student loan money.
Interviewer: Okay, so you have to pay that back?
Bruce: You do have to pay that back. Now there are grants out there people get
as well, and if you have a grant you do not have to pay that back as long as you
meet the obligations of that grant, which usually means going to school, not
dropping out, and so on.
Interviewer: Okay, very good. Now, are there other options besides the public
service program to help reduce a loan debt?
Bruce: Yes, there are. There is a specific forgiveness program for teachers,
teach in the title I school. A title I school means that it’s a school that
qualifies for title I funding, which is in a low income area. Teachers who teach
at the schools may qualify for another type of forgiveness, and that forgiveness
is based on what subject you teach. There is a scale of how much you can get
forgiven. Also for those who are not teachers and don’t work for the government
or nonprofit if you enroll, if you consolidate your loans and enroll in this
consolidation program, and get on an income-based repayment program, after 25
years of payment on the income-based repayment plan if there’s any balance left,
that’s forgiven as well. And that’s available to everybody with federal loans.
Interviewer: Okay, and is this program designed to encourage people, college
educated people, to take jobs in the government sector and in the nonprofit
Bruce: Absolutely, it absolutely is. It’s a great benefit and I believe they
are hoping it will entice people who are maybe a little bit more educated or a
little bit more qualified that might be thinking about going into the private
world, because maybe they can make a little bit more money there, to take a job
in the public sector because getting tens of thousands of dollars forgiven in
student loans is a pretty good incentive these days.
Interviewer: Right, very good incentive. Now, how can people reach you and find
out more information on this?
Bruce: people can visit our website at quickconsolidation.org, or you can call
us at 855-280-0850 and our counselors will take a look at your situation for
absolutely no charge, it’s absolutely free for us to take a look at your
situation, and let you know what the best options are for you.
Interviewer: Alright, wonderful. Bruce Mesnekoff, nationally recognized expert
in student loan management, thanks for joining us on South Florida Weekly.
Bruce: oh, thanks for having me Karen. I appreciate it, and have a great day.
Interviewer: You too.