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Best way to pay off my FFELP Loan despite being a nurse who works in a non-profit organization
March 15, 2020
10:45 pm
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Hailey Vuong, RN
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Good evening,

My name is Hailey Vuong, RN from Whitter, CA. I have an FFELP loan from my undergrad 1997-2003. I started making payments in 2007 after placing it on deferments during my nursing school. When I first found out about the PSLF program, I jumped right on it and completed all of the necessary paperwork just to find out I didn’t qualify. I made more than 120 payments since 2007, but most likely will not qualify for the PSLF program so I am deciding to pay it off. My original loan amount was about $23K. My remaining balance now is about 15,941.72 with a 7% interest rate. My question is, what would be the best approach to pay off this loan?

March 15, 2020
11:00 pm
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Indiana
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Forum Posts: 352
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May 3, 2014
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Under normal circumstances, I would say when forgiveness is off the table and you are looking to pay it off in full, check rates with 3-5 refinance companies and lock in the best rate you can find to eliminate the debt.

These are not normal circumstances.

One thing to consider: is it possible you will ever need the protection of an income-driven repayment plan? I would think that being an RN right now is among the most stable fields, but I don’t want to make any assumptions.

Another factor to consider: Trump just announced he is freezing student loan interest rates. We don’t have full details on the program yet, so it is unknown if there will be a way for FFELP loan borrowers such as yourself to get the 0% rate. If you can get the interest rate down to 0% for the next six months or so, it could make knocking down that balance much easier. Be sure to check out our page on the interest rate pause terms and details. It will be updated as more information becomes available.

My suggestion would be to follow the news closely in the next few weeks and then make a decision when you have more information available.

March 27, 2020
1:55 pm
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Lynda Neef
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Hello – I have spent 2 days researching my student loans. I currently have 2 unsubsidized FFELP loans lists in the NSLDS that seemed to be potentially eligible for federal direct consolidation. I’ve worked in nonprofit for many years so trying to qualify for the service loan program seems to be in my best interest and therefore consolidating into a direct federal loan makes sense. My main point of confusion right now is whether or not my FFELP loans are in fact considered federal loans? They are services by AES but apparently PHEAA sold them to Suntrust in June. Does that mean my FFELP loans are in fact “private” or are they inherently “federal” by definition. Sorry – I’m just very confused….

March 27, 2020
2:14 pm
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Indiana
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Forum Posts: 352
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May 3, 2014
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Hi Lynda,

The FFELP loans are definitely tricky.

The actual loans are issued by private lenders, but the federal government guarantees the debt, so they look like federal loans in some circumstances, but like private loans in others. A good summary of the FFELP program can be seen in this Wikipedia article: https://en.wikipedia.org/wiki/Federal_Family_Education_Loan_Program

You are right that these loans are eligible for federal direct consolidation, which would make them a 100% federal loan, but there are a number of things to watch if you elect to go through that process: https://studentloansherpa.com/consolidation-ffel-federal-loans-student-loan-forgiveness/

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