- South Carolina
About 2004, my spouse and I were contacted by ACS Lending and asked if we’d like to consolidate our loans. We called our then lender and were encouraged to consolidate our Direct Loans and private loans into one large Joint Spousal Consolidation Loan. We were advised that our payments would go down as would our interest rate. We quickly found our payment increased and the interest rate went to 7.8%. Our payment period went to 30 years. All of our loans then became FFELP Loans.
My husband began his teaching career at a small public university in South Carolina, leaving a more lucrative position at a private college in New England believing that the sacrifice in pay would be worth it in part because of PSLF. I worked in Social Services and now work in human resources in the same university; all public service.
As both of us are public servants, the MOMENT the Public Student Loan Forgiveness program began 2007, we enrolled. At no time were we ever told we were not eligible for the program! We would faithfully resend out the application every year because we were so afraid something would go wrong. We almost never received a response to our application and usually it was only a 'thank you we received you paperwork' type of letter if we did.
Then in about 2012, after faithfully paying for almost SIX YEARS, we were told we did not qualify for PSFL, as our loans are FFELP Loans and make us ineligible. At NO time were we ever told that we would not qualify for the program until then. We were crushed but continued to make timely payments to the exclusion of helping to pay for our children’s education; forcing them to take out excessive student loans of their own; perpetuating more debt. These loans are so financially oppressive they keep us from actually paying money directly into the economy and affect our quality of life. In 32 years of marriage we just bought our second new car. The first one died a few years ago with over 300,000 miles on it. The one prior to that was an older 1993 Ford with no air conditioning; FYI we live in South Carolina. We were told by a mortgage lender that student loan debt was “good debt” because “you can’t escape from it” and were given a mortgage… we bought a very small house in a rural neighborhood where there are five of us in 1100sq foot and three bedrooms. If my father in law hadn’t left us $10,000 when he died, we would probably still be renting an apartment.
We've prayed that something would change, and because we believed in the PSLF program, we both chose to stay in Public Service, forgoing other potentially more lucrative positions. Retirement for us is a dream. If we follow the current payment plan, my husband will be 76 and I will be 72 before we pay it off. To complicate things I have a heart condition which sometimes makes 72 look optimistic. This gives me great anxiety thinking that my husband will be stuck with the weight of these loans without me there to help.
In the last few years, we were advised by FedLoan to consolidate our FFELP Loan into a Direct Loan thereby making it PSLF eligible, but of course, our repayment clock would reset to zero meaning we’d be dead before we paid them off. Seriously. Then we were told we could not do that because our Spousal Consolidation FFELP Loan makes us ineligible for Direct Loan consolidation so we were actually told: "Don't bother".
Our loan debt is currently a crushing $169,000 with a monthly payment of about $1,550; which we try to over-pay every month. We have always felt paying the loan principle was fair, but we cannot ever rise above the capitalizing interest! In 2003 we owed $150,325 and today, in 2022 we owe $169,000!!! Even auto loan and mortgages don’t operate this way.
We have trusted FedLoan and our many prior servicers to guide us through the process, but we have been given 22 YEARS of misinformation every time we call. We trusted the Department of Education and FedLoan to honor the PSLF for EVERYONE who faithfully followed the rules, but we have been left behind yet again, unable to have our FFELP SPOUSAL Consolidation Loan forgiven even after 16 years of faithful payments and decades of public service.
The FFELP SPOUSAL Consolidation Loans must be PSLF eligible, but we do understand this will take a bill to be passed. FedLoan has given us, and many, many other people wrong advice and we have all suffered for it. We would NEVER have considered Joint consolidation if it hadn't been suggested to us as a smart move by The Fedloan persons we spoke to.
We seek the passing of the Joint Consolidation Loan Separation Act this year! This would make those of us who have these types of loans eligible to consolidate into Direct Loans, thereby eligible for PSLF.
We would like those who answer the phones at FedLoan and ALL servicers to be well educated and familiar with the policies and procedures of ALL Student loan types!
We are seeking our initial contracts/ paperwork and payment histories from servicers... some of which are no longer in business like ACS. There is NO WAY to retrieve the payment history from them at all. I have inquired at Nelnet and FedLoan but was told they cannot access this either this needs to be remedied. No other loans operate like student loans. You can always get your loan history on your car or home… forever! You can also refinance them if the interest rate goes down or even go bankrupt. You cannot do any of those things with student loans.