Consolidated loan>>PSLF

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    Good day-
    So I decided to consolidate my loans in 4/2019 then I was approved for the Public service loan forgiveness which then transferred my loans to Fed loans. I just started my first payment July 1st. If I’m looking to purchase within 3-6 months and just started paying off my loans would this hold me back without 12 months payment history. My loans were IBR and was paying $0. Naca counselor said that was unacceptable and that’s why I decided to just consolidate to have an idea what my payments would be.



    Hello Rgbkitty,

    The consolidation was in fact unnecessary and may indeed hold you back. While we must have a non-zero payment figure for student loans when calculating your budget and affordability, there are several ways of obtaining that figure with an IBR plan showing a zero payment. These include obtaining a letter from the lender stating how much you would be paying based on your income if you were not in a zero-plan, and creating a figure using the official payment calculator that exists online.

    The consolidation is the creation of a new line of credit which will now require a twelve-month payment history before you can be qualified.

    Not to add insult to injury, but 96% of those who enter the Public Service Loan Forgiveness program fail to achieve the objective of their loan being erased. Many fail because of a “technicality” of some sort usually involving failure to comply with some small detail. A quick search on the web will take you to several articles regarding the issue. Were the PSLF program in the private sector instead of a government program, it would immediately be branded as a scam.

    I’m truly sorry I can’t bring you more positive news.

    Tim Trumble
    Online Operations, NACA

    • This reply was modified 1 year, 1 month ago by TTrumble.
    • This reply was modified 1 year, 1 month ago by TTrumble.

    Hello TTrumble-

    Consolidating my loan is way more affirdable and reduces my monthly obligations sustantially. I’m hoping this won’t hold me back and would be at the discretion of the underwriter. I was at the at the ATD event in New york and was told otherwise. Thank you for your prompt response.

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