FAFSA student loan interest rate exploding - default risk with no relief options?

welcome to the club... system is RIGGED against us. my original loan was 36K now its 52K and ive been paying for 5 years!! they dont even apply payments to principal until u pay all interest first so ur basically trapped forever. administration promised loan forgiveness then backed out. try calling FSA but good luck getting thru lol

I understand your frustration, but there are actually several options you might not be aware of. First, the paperwork issue with income-based repayment can be resolved - it sounds like you may have a mismatch between your reported income on the IDR application and your tax returns. This happens frequently. Second, you should immediately apply for an economic hardship deferment since you've been laid off. This is different from forbearance and won't count against your forbearance limits. You'll need to provide documentation of your unemployment benefits or job loss. Third, look into loan rehabilitation if you do go into default. It's a one-time opportunity to restore your loans to good standing through a series of 9 on-time payments based on your income. The system isn't perfect, but there are more protections than most people realize.

OMG I'm going through almost the exact same thing!!! My interest capitalized during the pandemic and added like $9k to my principal even though I thought payments were paused?? Make it make sense! I've literally been crying about this for weeks. Has anyone figured out how to get the IDR waiver to actually work? I applied 3 months ago and they keep saying my application is "in process" whatever that means.

I went through something similar last year and finally got it resolved after months of fighting the system. What worked for me was using Claimyr (claimyr.com) to actually reach a real person at Federal Student Aid. I kept getting disconnected or put on 3+ hour holds until I found them. Their service let me skip the phone queue and got me connected to an FSA agent in about 15 minutes who was actually helpful. The agent discovered my servicer had been incorrectly calculating my IDR payments and fixed the issue on their end. They also helped me submit the correct hardship documentation. They have a video that shows how it works: https://youtu.be/TbC8dZQWYNQ After getting that sorted, my payment dropped from $780/month to $162/month based on my actual income. Don't give up - there are options but sometimes you need to reach the right person who actually knows the rules.

yall need to stop whining and pay what you agreed to tbh. i paid off my loans by working two jobs and living with roommates for 5 years. nobody forced you to take out loans. these forgiveness programs are just making inflation worse for everyone. personal responsibility matters.

Financial aid advisor here. There's a lot of confusion in this thread I want to clear up: 1. For immediate help with potential default: Call your servicer and request an Administrative Forbearance specifically while you resolve the IDR application issues. They must grant this while paperwork is being processed. 2. For the tax return issue: You can submit alternative documentation of income (recent pay stubs) instead of tax returns for IDR qualification if you're having issues with your tax documents. 3. For long-term solutions: The new SAVE plan (replacement for REPAYE) caps undergraduate loan payments at 5% of discretionary income instead of 10%. 4. If you're unemployed: Your IDR payment should be $0 during this period. 5. Interest capitalization rules have changed under the new regulations - interest should not be capitalizing except in specific circumstances now. I recommend filing a complaint with the FSA Ombudsman if your servicer is providing incorrect information or not processing your applications properly.

I had a similar nightmare with defaulted loans. What eventually worked for me: 1. Filed a CFPB complaint against my servicer (surprisingly effective) 2. Got into the Fresh Start program to get out of default 3. IMMEDIATELY applied for income-based repayment with my $0 income 4. Requested a recalculation when I found employment The system is absolutely broken, but there are pathways through it. Don't ignore it though - that makes everything worse. And DOCUMENT EVERYTHING - dates of calls, who you spoke with, what they told you. This saved me multiple times when they tried to claim I hadn't submitted paperwork.