IMPORTANT COVID-19 UPDATE: If your income has gone down suddenly due to a layoff or reduction of hours, you may be eligible to have your student loan payment reduced through a federal income-driven repayment program. Please visit the new automatic sign-up tool that our partners at Savi created to help NEA members dealing with the economic impacts of the novel coronavirus.
While attending a Seminole Education Association (SEA) presentation, Florida teacher Thomas J. Bugos II learned about a new tool that helps educators manage and reduce their student loan debt. Bugos quickly discovered he could dramatically shrink the more than $32,000 in student loans he had acquired while earning his master’s degree.
After answering questions and putting loan information into the NEA Student Debt Navigator, powered by Savi, Bugos learned that he was eligible for a $5,000 loan forgiveness program, a lower income-based repayment plan and another teacher-specific forgiveness program that would wipe out the remainder of his debt—as long as he made the required payments for the next 37 months.
The result: Bugos expects to reduce roughly 70% of his loan burden—from about $32,000 to just over $8,900.
“I do not think I will ever have another impromptu meeting resulting in such a dramatic, positive change in my life,” Bugos says. “It was so impactful.”
Bugos is far from alone: On average, Savi users reap more than $1,500 a year in student loan savings by using the tool to assess whether they qualify for various federal repayment and forgiveness programs. For educators, the Teacher Loan Forgiveness and Public Service Loan Forgiveness (PSLF) programs have served as viable resources to relieve their student debt. There are also repayment plans that can lower monthly payments based on a teacher’s income level.
But finding the best option can get complicated, and that’s where Savi steps in to lend a hand, simplify the process, and make a big impact.
Savi makes it easy to figure out your options and savings potential
There is an abundance of information about forgiveness and repayment programs, but it’s overwhelming and typically aimed at a large, general audience. Savi’s co-founders, Aaron Smith and Tobin Van Ostern, wanted to create a more streamlined, personalized and interactive approach.
“We designed the Savi platform to cut through the confusion and anxiety around student debt,” Van Ostern says. “We wanted people to understand all their options—including potential forgiveness—and then make it really easy to enroll and stay up to date.”
Both men have a background in college debt relief policies and consumer education, and they’re passionate about advocating for and supporting student borrowers. “I’ve seen firsthand the burden and bureaucracy of this system from trying to manage my own debt,” Smith says. “It has been incredibly rewarding to help people earn freedom from that debt.”
NEA members have special access to the NEA Student Debt Navigator, powered by Savi, and there is no cost to determine your eligibility and potential savings. Input information about yourself and your loans, such as your income, the amount of your monthly student loan payments, how long you’ve been teaching and where, and subject(s) taught. And if you have an online account with a federal loan servicer, you simply provide your login. Savi will then sync with the servicer and instantly populate all required loan information for you.
The Savi tool analyzes your information and displays available repayment and forgiveness options side-by-side. For example, it knows if your school receives Title 1 funding, which can qualify you for Teacher Loan Forgiveness or Perkins Loan Teacher Cancellation.
If you opt to enroll in a forgiveness or repayment program, Savi will populate all necessary information in the correct Department of Education application, saving you time and preventing errors that could lead to delays. If you choose to file electronically through the platform, you can do so at a reduced cost of $29.95—a savings of $60 off the price for non-NEA members. You’ll also receive ongoing advice, tools and information to help you better manage your debt.
Not all debt can be forgiven or reduced
Not everyone qualifies for income-based repayment, Teacher Loan Forgiveness or PSLF programs. However, there are still avenues to explore via the NEA Student Debt Navigator that can provide significant relief:
- Consolidation allows you to combine multiple federal education loans into one for a single monthly payment. You can transfer variable-rate loans to fixed-interest ones, while simplifying and even lowering monthly payments by spreading them out over a longer period of time (up to 30 years). Be sure you understand the possible negative outcomes of a consolidation—including the loss of interest rate discounts, principal rebates and other borrower benefits. Savi’s student loan experts can help you navigate potential consolidation avenues and explain their pros and cons.
- Deferment or forbearance lets you temporarily stop making payments or reduce the amount paid to avoid defaulting. You can pay interest as it builds up over this time, or you may be able to delay this by adding it to your principal balance after the deferment/forbearance period (a process known as “capitalizing” the interest). If you take the latter route, keep in mind that the total amount you repay over the life of a loan could increase.
Run your numbers today with the NEA Student Debt Navigator calculator and take charge of your student loan debt.