Graduates

Disputes with your federal student loan servicer?

By Sigrid | Posted on

If you have not received satisfactory results working with your student loan servicer resolving a dispute you may contact FSA Ombudsman Group at fsaombudsmanoffice@ed.gov or 1-877-557-2575 for assistance.

For example if, due to the current problem with GradPlus, you had to make a payment or your account was debited by your student loan servicer without authorization while you were in school, the Ombudsman’s office should be able to assist you in retrieving your payment or clearing up discrepancies with your student loan servicer.

Need help to find your federal student loan servicer?

By Sigrid | Posted on

The processing of federal student loans is contracted out to one of several loan “servicers.” You can find the name and contact information for the servicer of your loans on the National Student Loan Data System (NSLDS) website.

After logging in, click on the individual loan number to access detailed information such as the “scheduled start of repayment” date and the servicer / lender contact information. The most common lenders for Boalt students are Direct Loan Servicing (ACS) and Department of Education (Pheaa). Regularly updated contact information for each servicer can be found on the Department of Education’s studentaid.ed.gov.

Some Boalt graduates reported that their federal student loans were transferred from Direct Loan Servicing (ACS) to another servicing provider without any notice or access information. The NSLDS website is the best place to find the new servicer’s information.

Update to “LRAP funds are taxable?” blog post

By Sigrid | Posted on

Berkeley is not issuing 1099’s because it has concluded that the benefit is excluded as a refinancing loan that is discharged under § 108(f)(1) of the Internal Revenue Code. Consequently the Disbursement’s Office is not reporting LRAP payments to the IRS.

Please consult a tax accountant or tax attorney for advice on the taxability of LRAP.

”Form 1099 series is used to report various types of income other than wages, salaries, and tips (for which Form W-2 is used instead). Examples of reportable transactions are amounts paid to a non-corporate independent contractor for services (in IRS terminology, such payments are nonemployee compensation).”

Update to “LRAP funds are taxable?” blog post

By Sigrid | Posted on

On March 18, 2012 the IRS released the Publication 970, Tax Benefits for Education for 2011 returns. Unlike in previous editions, the “Law school LRAP” is no longer listed as being tax free. According to the revised p970 edition for the tax year 2011 LRAP funds are taxable income unless for services in the health care profession as defined by the IRS p970 pages 36 and 37.

We believe this speaks to the availability of the exclusion under § 108(f)(4), which addresses LRAP programs as such and is restricted as stated, and that it does not speak to the availability of the exclusion under § 108(f)(1), which provides a separate exclusion for discharge of indebtedness that covers public interest employment more generally. Under the LRAP program, funds are loaned to a participant to assist with debt repayment and then this loan is discharged. Thus there is an argument that the exclusion in § 108(f)(1) applies. We are aware of no ruling or other statement by the IRS that the exclusion under § 108(f)(1) does not apply. But neither are we aware of clear authority that it does apply. Rev. Rul. 2008-34 is authority that § 108(f)(1) exclusion does apply to an LRAP program but is not clear authority.

If you do report the LRAP forgivable loan as income you should be able to deduct the amount of the benefit used to pay interest under § 221 though the deduction is subject to a cap.

Since there is discussion within the law school community based on IRC § 108(f)(2) that the LRAP forgivable loan should not be taxable, we recommend that you consult with a tax accountant for further advice.

LRAP funds are taxable?

By Sigrid | Posted on

On March 18, 2012 the IRS released the Publication 970, Tax Benefits for Education for 2011 returns. Unlike in previous editions, the “Law school LRAP” is no longer listed as being tax free.  According to the revised p970 edition for the tax year 2011 LRAP funds are taxable income unless for services in the health care profession as defined by the IRS p970 pages 36 and 37.

If you do report the LRAP forgivable loan as income you should be able to deduct the amount of the benefit used to pay interest under § 221 though the deduction is subject to a cap.

Since there is discussion within the law school community based on IRC § 108(f)(2) that the LRAP forgivable loan should not be taxable, we recommend that you consult with a tax accountant for further advice.

Please see  excerpt of the 2011 Tax Benefits for Education p970.

IBR enrollment must be renewed annually with your loan servicer

By Sigrid | Posted on

Last Fall the rules for Income Based Repayment (IBR) changed.

Approximately every twelve months the servicing provider for your Direct Loans will send you a notification with a time-sensitive request to submit either your most recent tax return (1040, 1040 A or 1040 EZ) or an Alternate Documentation Form along with proof of you current income. In order to keep your IBR enrollment active you must respond within 30 days of the date of the letter. If the requested documents are not received within those 30 days, your loans will default into the 10-year repayment schedule.

Please make sure your lender always has your current address and that you read all correspondence.

PSLF Employment Certification Form

By Sigrid | Posted on

The Department of Education released its Employment Certification for Public Service Loan Forgiveness forms: www.studentaid.ed.gov/publicservice and a Dear Borrower Letter. Please read the PSLF Fact Sheet, the Q&A and instructions very carefully before submitting your Employment Certification for PSLF.

The employment verification process is a must for all borrowers, who are enrolled, or at some point anticipate enrolling in IBR, and plan to utilize the Public Service Loan Forgiveness Program (PSLF). To read more about IBR and PSLF please go to IBRinfo.org.

To start the verification process you need to submit the employment certification forms completed and signed by your employer, either at the end of a calendar year during which you were employed by a PSLF qualifying employer, or at the end of such an employment.

The PSLF is a federal program that works in conjunction with the Income Based Repayment (IBR) option and is independent of the LRAP.

Loan Servicing Centers for Federal Student Loans

By Sigrid | Posted on

Some Boalt graduates reported that their federal student loans were transferred from Direct Direct Loan Servicing (ACS)  to another servicing provider without any notice or access information.

If that happens to you, please check the Federal Student Aid’s Help – Contact site for contact information to your new servicing provider.

Student Loan Repayment History for the period prior to October 2011

By Sigrid | Posted on

Several LRAP participants contacted our office regarding the limitation of Direct Loan Servicing’s website, myedaccount.com. Along with the transition to the new website several valuable features, such as the payment history prior to October 2011, are no longer available. According to the Direct Loan Servicing School Hotline documentation for this time period can be obtained upon individual request. You must call Direct Loan Servicing at 1-800-848-0979 and ask for a Payment and Principal Balance History Log. It will take approximately 2 – 4 weeks to receive the information via postal mail.

Class of 2011

By Sigrid | Posted on

Up-to-date we received 61 applications from 2011 graduates. That is an all time record!

Welcome 2011 graduates to the LRAP…………you are awesome!