Someone Took Out A Federal Student Loan In My Name. What Should I Do?

Posts Tagged ‘student loan’

Someone Took Out A Federal Student Loan In My Name. What Should I Do?

|

When somebody uses your name and/or your social security number to apply for a student loan, there’s a good chance that they forged your signature in order to have the application go through. Many people don’t even find out that a student loan has been taken out in their name until they look at their credit report or receive a notice from the student loan lender that payments are now due. If you find out that someone has obtained a student loan in your name and signed a promissory note for it on your behalf, you need to know what action steps to take to resolve the issue.

Here’s what you need to do:

Gather documents that show the loan is in your name. Gather all documents that indicate a student loan has been taken out in your name and make a copy of everything. You will need to prepare this information to share with the U.S. Department of Education.
Prepare identifying information. You will need to prove that you did not sign a promissory note for your student loan by showing the U.S. Department of Education you are not the same person who applied for the loan. The Department will need to see samples of your signature. The signature that appears on your Social Security Card, your driver’s license, on a government-issued ID card, a passport, or even on your birth certificate are all valid forms of identifying documents for your signature.
Gather documents with your signature around the time the loan application was submitted. Another way to prove that you are not the person who signed for a promissory note on a student loan is by collecting documents dated for around the time that the student loan application was submitted. These documents will need to have your signatures on them, and may be more valuable than just submitting examples of signatures on your driver’s license or on a social security card.
Provide information about your activities around the time the loan application was submitted. You can also prove that there is now way you could have applied for a loan and signed a promissory note based on what you were doing at that time of year. You could show proof of employment, for example, or provide proof of where you were living when the loan was issued to a school that is nowhere near you.
Provide a report from a handwriting expert. If there is no other reasonable way to prove that you did not sign the promissory note, you can have a professional handwriting expert review your signature and make a statement that your signature does not match those that are on the promissory note.

Be sure to carefully check your credit reports from Experian, Equifax and TransUnion to see if there are any other signs that someone has stolen your identity and obtained credit in your name.

The Truth About Bankruptcy: Why All Your Debts WON’T Go Away

|

Author: The Money Coach

We’ve all seen and heard them: the TV ads and the radio commercial promises touting bankruptcy as a “fresh start” to help you get rid of overwhelming bills.

While it’s true that Chapter 7 bankruptcy can wipe out many consumer debts, such as credit card payments and medical bills, it’s also the case that a lot of different types of debts don’t get eliminated in bankruptcy court.

Additionally, Chapter 13 bankruptcy—which consumer advocates say many African-Americans have been steered into recently—isn’t designed to allow you to completely walk away from your debts, but rather to reorganize your finances and pay off debt over a period of three to five years.

So before you take the step of filing for bankruptcy protection as a cure-all, it’s important to be aware of the various financial obligations you will still have to handle even after you go through the process of bankruptcy.

Student Loans

Generally speaking, you can’t say goodbye to those huge student loan balances when you declare bankruptcy. However, the bankruptcy court may make an exception if you can prove that repaying your student loans would pose an “undue hardship” for you.

In this situation, you have to prove that you cannot maintain a minimum standard of living and repay your loans, and that your financial situation is not expected to improve any time soon. Being unemployed isn’t proof enough. You must convince a court that you are practically unemployable and may not ever get a job.

So it is extraordinarily difficult to prove undue hardship. That’s why even though there were 1.5 million personal bankruptcy filings in the U.S. in 2010, virtually none of those bankruptcy petitioners received an undue hardship ruling from a court allowing them to discharge their student loan debt.

Child Support and Alimony

Bankruptcy courts will not discharge any child support payments or alimony you owe. If you owe back child support, you are still responsible for paying that debt. Any debts incurred from “the nature of support”, which are debts that are the result from a child’s care and medical expenses, are also not discharged by the bankruptcy courts. Read the rest of Lynnette’s article on Black Enterprise.

Financial Advice for 2011 College Graduates

|

Author: The Money Coach

If you or your child has just graduated from college, your number one goal may be getting a j-o-b.

Of course, that’s a lot easier said than done, with unemployment rate around 9% and even higher–a staggering 16%–for African-Americans.

Still, there are many steps recent college graduates can take to put themselves on the road to financial security, including numerous steps that have nothing to do with finding that next work gig. In fact, if you don’t yet have a job, the tips below can help you keep your finances in tip-top shape while you actively pursue employment.

Here are four financial strategies for the Class of 2011:

Avoid Credit Card Pitfalls

Once you leave campus life, it’s important to learn how to juggle a host of new expenses–rent, food, utilities, and more. If you haven’t already landed a job, you might be tempted to rely on credit cards to make end meet. But for your own sake, resist that temptation.

Keep a tighter rein on your budget by using a debit card instead, suggests Jesse Ryan, managing director, Accounting Principals. “If you must use a credit card, shop around for a card with a low interest rate, preferably below the 12% range, and try to pay off the card’s balance in full each month,” Ryan adds.

Check out CardRatings.com as a good place to find the best credit card that fits your situation.

Don’t Ignore Your Student Loans

If you borrowed money to pay for college, you probably had an “exit interview” in which the financial aid staff at your school reminded you that those student loans were just that – loans – and not free money. Still, much of what’s explained in those exit interviews seems to go in one ear and out the other for many students.

But the fact remains, you can’t afford to let your student loans go delinquent–or even worse, fall into default status.

So if you have any trouble whatsoever paying your student loans, or anticipate that you might, reach out immediately to your lender or loan provider. Particularly if you’re not yet employed, find out what options exist, such as getting a loan forbearance or deferment of payments. Even if you’ve defaulted on your student loan, there are steps you can take to get back on track. Read the rest of Lynnette’s article on Black Enterprise.

Who Should Consolidate Student Loans And Who Should Not

|

Author: The Money Coach

You may be wondering if it’s in your best interest to consolidate your student loans. Well, experts say that you can benefit from a consolidation—to a greater or lesser extent—only by taking into account the full details of your personal situation. For those of you having serious difficulty making your monthly payments, you definitely should look at consolidation as one of the options that can give you some financial relief.

At the same time, you shouldn’t automatically attempt to consolidate your loans if you could qualify for other, potentially more advantageous alternatives like a deferment, which would also lessen your economic burdens. Also, if you’ve already been paying off your student loans for many years, and are close to retiring that debt, it’s not financially prudent to consolidate and get a loan that would stretch your payments out for a newly extended time period, causing you to pay additional interest charges unnecessarily.

“The average student carries about $20,000 in student loan debt. For someone just starting to earn a salary, or planning to continue their education, this number can be daunting, but it doesn’t have to be a burden,” says Kevin Walker, CEO of Boston-based SimpleTuition, Inc. which helps students, parents, and others objectively compare education financing options.

Using the consolidation comparison tools on SimpleTuition’s Web site, you can compare multiple financing options from a variety of lenders and sort your loan offers by monthly payment, total cost of the loan, number of payments, fees, and annual percentage rates. “A basic understanding of how and when to consolidate the loans can alleviate confusion and help lower payments from the start,” says Walker.

Walker and other experts, like Robert Shireman of the Project on Student Debt, recommend that college grads not consolidate federal and private loans together. It’s far better to consolidate those loans separately because federal and private loans have significantly different rates, terms, and fee structures. And by consolidating a government-backed loan with a private loan, you may lose some of the benefits afforded under the federal loan system.

One upside to cash-strapped borrowers is that consolidation can give you more flexibility. With standard federal loans, you’re obligated to pay back your higher education debts in ten years. That can be tough if you’re on a budget or your income is limited. Depending on the amount of money you owe, a consolidated loan affords you the chance to extend your repayment period to as long as 30 years.

Ask The Money Coach

Posts Tagged ‘student loan’