These Federal Student Loan Borrowers Are Not Gone | Company
Not all FFEL borrowers can consolidate into direct loans
Consolidating into a direct loan can give FFEL borrowers access to the payment break, any existing federal student loan cancellation programs like the PSLF, and any possible future debt forgiveness.
But not all borrowers with commercially owned FFEL debt can consolidate, such as those with spouse consolidation loans or legal action against them for their debt.
A spouse consolidation loan prevents Michael Walcom and his wife from consolidating into a direct loan. The Boise, Idaho couple consolidated their debt together in 2003 and are currently paying just under $ 450 per month on their remaining debt of $ 36,000.
Their only income comes from Walcom, a former National Guard member who has worked as a federal employee since 2006. He now drives 60 miles a day from their 384 square foot cabin to work as an administrative clerk for the US Forest Service.
” I do not know what to do. Right now we’re barely doing it – there’s no room for maneuver, ”Walcom says. “It’s survivable, but it’s frustrating.”
Lawyers argue that lawmakers must allow those who have already consolidated FFEL debt to do so again.
“We need a way forward for borrowers to get a direct loan for the purpose of the payment break, which doesn’t hurt them in the process and puts them in place for parity with all other student loan borrowers.” federal, ”says Seth Frotman, executive director of the Center for Student Loan Protection.