THE Cambridge Connection - Episode 7

While a late payment can remain on your credit report for up to seven years, having all your accounts current can be good for your credit scores. Additionally, it stops further late payments from being added to your credit history, as well as additional late fees. For those having trouble with credit card debt, talking to a credit counselor and getting on a debt management plan could be a good option. The counselors may be able to negotiate lower payments and interest rates and get card issuers to bring your accounts current. Now here’s a potential myth that happens in the news all the time.

Cambridge Credit Counseling does not negotiate with creditors. They have guidelines, specific guidelines, on benefits that can be achieved and the amount of money that needs to be paid on a monthly basis to get reduced interest rates, usually averaging 8%. More importantly, the links show two trade associations that you would turn to, and one is the NFCC, the National Foundation of Credit Counseling, and the FCAA, which is the Financial Consumers Association of America, and those are the two trade associations that have legitimate nonprofit credit counseling members, which Cambridge is members of both. And the CEO, Christopher Vialli, plays a leadership role for the FCAA and advisory for the NFCC. So now I want to turn to debt settlement and credit repair and the information that’s in this blog as well.

So I’m going to read this out of the article. You may also hear about credit repair companies that offer to repair or fix your credit for a price. It may seem tempting, but credit repair companies can’t do anything that you can’t do on your own for free. Similarly, you should be very wary of so-called debt settlement companies that may encourage you to stop making payments in an attempt to try and settle the debt for less than you owe. It’s important to understand that Cambridge Credit Counseling has partnered with this show because they provide an immense portfolio of information and assistance that I know helps people.

Segment preview and sponsor message

I’m here 28 minutes every Saturday to get real about financial empowerment. org or 1-800-CAMBRIDGE. Now don’t go away. I’ll be diving in with my co-pilot, Arianne, to talk about some recent current events. Matter of fact, there was a segment about a week ago on 60 Minutes that was talking about public service loan forgiveness and student loans.

And then we’ll be doing the Real People, Real Problems segment, and you’ll be hearing from Tina Marie and her Cambridge Credit success moment. And then my special guest this week is Todd Friedhaber, student loan counseling manager with Cambridge Credit Counseling. This is Gordon Oliver, and you’re listening to The Cambridge Connection right here on WHM. Did you know financially distracted employees are less productive? Hi, I’m Christopher Vialli, president of Cambridge Credit Counseling.

As a Western Mass nonprofit, we can help your employees manage their debts safely and responsibly, and the partnership is free. We already proudly partner with companies like AAA and the Mass Teachers Association. So call me, Christopher, at 1-800-CAMBRIDGE, and let’s talk about bringing financial peace of mind to your employees. Welcome back. I’m your host, Gordon Oliver, with The Cambridge Connection right here on WHMP, and I’m joined by my co-pilot, Arianne, to first talk about some current events.

Student loan landscape and current events

And we also have our special guest, Todd, the student loan counseling manager from Cambridge as well. Part of this show is about protecting you, the consumer, or your loved ones and friends. And we’re going to talk about student loans today because, just like there are other scams out there that will take your money, there are plenty out there that have been taking money from people by promising them things like loan forgiveness. And if you’ve seen anything in the news, you recognize how that program is just simply broken and hasn’t been working very well. 847 trillion outstanding in student loan debt, that’s a very big problem, obviously, that everyone’s aware of.

So Ari, what are your thoughts? You’ve talked about your own personal journey. What are your thoughts about the whole student loan maze? Student loans are a subject near and dear to my wallet. I feel like they tried to prepare us with having entrance counseling and exit counseling when we are going to be taking out student loans, and that counseling just went nowhere for me.

You know, I first saw it when I was 17, and then I saw it again when I was coming out of my bachelor’s, again when I went for my master’s. And it’s a necessary evil. You click through the page, you take the quizzes, and you do it because you have to do it. But I honestly don’t think I retained enough of it to really know what I was getting myself into. Just like the youth doesn’t have any financial education, if you think that that entrance counseling or exit counseling is going to prepare you for anything, you’re a little crazy, right?

Absolutely. And isn’t that one of the things of the Stop Student Debt Relief Scams Act of 2019 with the exit counseling? Can you explain that to me a little bit? So a lot of the companies that were pitching, people could have their loans forgiven, were actually accessing the database for the Department of Education to get their loan information. Pretty much making it an easy, you have to do nothing, we’ll do everything.

And while in some instances they were doing some of that work, it’s just the amount that they were charging for it. And this is a big deal with the Department of Education. Like for years they’ve been saying, you know, we have to stop this because it’s a false promise when people are desperate for that kind of a promise, right? Have your loans forgiven. We’ll do it for you.

Yeah. A couple grand here, a couple grand there. Don’t worry about it. But it’s actually the same process. The problem is these servicers were never thorough enough to go through with the consumer what they had to do.

So I know our partner, Cambridge Credit Counseling, has dedicated so much time and so has the counseling industry in general to put resources into this, but there’s no revenue from it. So they’re doing a lot of free counseling and a lot of steering, especially with groups like the teachers groups that they assist as well. So it’s an important topic. And now you have a couple more things happening. Now remember, this show is because we want to prepare people now for when their loans are going to come due in February.

More problems exist that there are three or four servicers, like Navient being the biggest one, and FedLoan being the one that handles student loan forgiveness, are both trying not to renew their contracts with the Department of Education. So it again is looking like a mess. And then I’ll lastly say this. It’s the worst time of the year for the consumer. They just came out of the summer with debt.

Now they’re going into the holidays and incurring more debt. And now next thing you know, your student loan payment that you weren’t planning on now coming due again, on top of everything else. Yeah, that’s right. Especially after the pandemic, too. If you’re just joining us, this is your host, Gordon Oliver of The Cambridge Connection.

Listener question on loan types

And now it’s time to talk specifically with Ariane, who is Cambridge Credit Counseling’s resident digital maven and education enthusiast. Ariane has been at Cambridge since 2016, and she’s quickly cemented herself as not only the digital brand specialist, but the financial education coordinator. If you’re wondering if she’s qualified, she’s a licensed educator with her master’s in education from Boston University. Hello, Ariane. Hey, hey.

So according to you know, I’m always so jazzed to be here for our Real People, Real Problems segment, where each week I pull questions from our social media followers to answer here on the air. And we get questions sent in from all over the country on just about every financial topic you can think of. So on par with this week’s theme, I’ve chosen one of the several student loan questions that we get actually every month. org. And remember, you can contact us too.

We’ve got Todd, the student loan counseling manager from Cambridge Credit Counseling here to answer for us. So a true professional with real advice, you know, for our Real People with Real Problems. So Peyton, our neighbor from Connecticut, asks, I’ve recently found out what type of student loans I have. They’re not as much as I expected, but I’m able to commute from home and I skipped out on the meal plan. I was even able to find downloadable copies of my textbooks for free online.

Shh. The ones I couldn’t find for free, I was able to borrow from websites that lend you textbooks. It saved a lot of money. Anyways, I’m looking at the types of loans I have, and I have both subsidized and unsubsidized. Can you explain the difference?

Why did I get both? Can I consolidate them into either subsidized or unsubsidized? Any help would be appreciated. Thank you for your time either way. Aw, so polite.

So Todd, you’re the pro. What do you think? Well, first of all, thank you, Gordon and Ariane, for having me on the show today. Great question because I get that all the time, and that’s probably one of the biggest concerns I have when speaking with borrowers is them not knowing what type of student loans they actually have. When I ask them, they’ll usually say, oh, I have a subsidized, I have an unsubsidized, I have a Salime.

All subsidized and unsubsidized means is that if you have an unsubsidized loan, that it was determined that this is a needs-based type of loan. And during periods of deferment, the government is going to be paying the subsidized portion, the interest that is accruing. The government will be paying that interest when you’re in deferment. When you have an unsubsidized loan, that means that you are expected to be paying the interest that is accruing. When you are in forbearance, whether you have a subsidized or unsubsidized loan, you are expected to pay the interest.

Todd, that’s great. I just, for the listeners, this question looks like it’s framed around the federal type of student loans. So this is not anything to do with private loans that you have with banks. This is just federal student loans. Exactly.

A federal student loan is going to be either subsidized and needs-based. I have a need to have a subsidized loan where the government is going to pay that interest that’s accruing during periods of deferment and unsubsidized. Private loans are just strictly private loans. So for the listener, it looks like Peyton was able to figure out where to find out her loan types. Where would the listeners go if they were not knowing what types of loans they have?

If you did not know, you would want to go to NSLDS. gov. You’re going to need to log in with your FSA ID. Now if you don’t have an FSA ID, in 2015, the Department of Education moved away from FSA PINs to FSA ID. gov.

And it’ll take about two minutes. It’s just a username and a password. But Social Security Administration is going to want to confirm your identity. Most people can get their identities confirmed in 30 minutes, but it can take up to 72 hours. And there’s a ton of information on that website.

But if you just log into that, you can file for loans. You can see what loans you have. You can file for consolidation. You had mentioned, Ari, that this person was talking about consolidating federal student loans. When it comes to consolidating federal student loans.

Why is that? Because when you consolidate a federal student loan, it’s a weighted average of all your federal student loans. And then they round up, and there’s an eighth of a percent. A lot of times I’ll get calls where I consolidate my federal student loans, and my payment actually went up. Also, you have to be very careful.

There’s some great times when you don’t. You should consolidate federal student loans, sometimes maybe when you want to and sometimes when you shouldn’t. But if I’m seeking public service loan forgiveness, that’s one of the forgiveness programs, and I have direct loans, and I’ve been paying for several years, not even nine, but seven years, maybe just for six months, and I decide to consolidate my student loans, then it becomes a new loan and I lose that payment count. I go right back to payment number one. I’ll also add that it is completely urgent that if you consider federal student loans being consolidated through private lenders, you must go through the process to make sure that there’s no other option for you as far as the programs that the federal government offers, especially when it comes to things like loan forgiveness.

Exactly, because when you take a federal student loan and you consolidate with a private loan, there’s no one doing it. You will lose out on any federal benefits currently and any federal benefits that may come down in the future. Talk to your servicer, talk to counselor at Cambridge Credit Counseling at 1-800-CAMBRIDGE, because we couldn’t possibly cover all the information we need to cover on this show, but we want to start with awareness. Got to look into your situation, got to know what your options are. All right, well, thank you so much, Todd, for answering our question this week.

Sign off and cohost banter

That’s it for me, so join us next week, same bad time, same bad channel, for our Real People, Real Problems segment where we answer your questions on the air. org. Let’s talk. Have a great week, everyone. Stay positive, test negative.

Thank you, as always, co-pilot Arianne. I appreciate you, and Todd is going to stick around to discuss some more important information to know about your student loans, so don’t go away. We’ll be right back. This is your host, Gordon Oliver, and you’re listening to The Cambridge Connection here on WHNP. Hey, Gordie.

I guess we’re here to talk to our listeners about Cambridge Credit Counseling, the company in partnership with your new show, The Cambridge Connection. So what shall we tell them? Hold on, Arianne. It’s Tina Marie. I think we should remind everyone that asking for financial wellness advice on student loans, buying a home, or even paying off credit card debt isn’t anything to be embarrassed about.

It takes a lot of courage to ask for help. You got it, Tina Marie. And Cambridge Credit Counseling offers so much more than just helping to manage credit card debt. That’s why Gordon is hosting the Cambridge Connection radio show every week. It’s all about empowering people to pick up the phone and ask for help.

Hey, Arianne, is it my turn now? Oops, sorry, Gordie. We’re out of time, but if listeners need some financial wellness advice, there’s always time to call 1-800-CAMBRIDGE. That’s 1-800-CAMBRIDGE. Hello, everyone.

Cambridge success story on college debt

I’m your host, Gordon Oliver. Welcome back to The Cambridge Connection. And I’m here with Tina Marie, the rock star credit counselor with 25 years of experience for our Cambridge Credit Success Moment. Welcome, Tina Marie. Thank you, Gordon, for having me.

It’s always nice to come share positive thoughts in such struggling times. Ironically, I do have a success story about a college student. I recently spoke with somebody. She, while in college, there were a lot of offers given to her as far as credit cards. And if you think about it, we don’t have the proper education growing up in high school to deal with budgeting, balancing checkbooks, something just that easy.

These are topics we’re gonna continue to cover on this show, for sure. And a lot of them don’t understand the concept of interest as well. So she found herself using these credit cards. And like a lot of college students, she wanted to be with the times. So she actually took out store credit cards with high, high interest rates just to keep the wardrobe up, keep with the time.

So she ended up with about $11,000 in credit card debt while in college. She thought, you know, once she graduated, she’s gonna land that six-figure job right away and pay them off. It doesn’t always happen that way. If you’re just joining us, I’m your host, Gordon Oliver with The Cambridge Connection here with Tina Marie sharing a Cambridge success story. And we’re talking about a college student that was offered some credit cards, got into some debt.

Now, where does that take us? Well, she graduated college, $11,000 in credit card debt, $32,000 in student loans. Not to mention, she’s out of college. She doesn’t have that meal plan anymore. Parents aren’t paying for the dorm.

So she’s got everyday living expenses, still trying to land that six-figure job that she went to school for. Basically, with the credit cards, her payment was $325 a month with an average interest rate of 26%. Again, let’s talk. They’re store credit cards. High, high interest rates.

So we went extensively through her income at the time and her expenses. We did develop a budget for her that, again, was something she was never taught. People think it’s common sense, but common sense isn’t all that common. That happens just about every call that comes in, right? Any email, any calls about help, you start with the budget.

Correct, you know, and there wasn’t really, my expertise isn’t student loans, and this is where Todd comes in. So I was able to actually put her on a payment plan with her credit cards. We reduced her payment from $325 down to 210. 46 payments, interest rates 10% and below. So I did my due diligence.

And at that point, working with Todd at Cambridge Credit, I was able to transfer her to Todd where he could address the student loan debt. Todd? Yes, when it comes to student loan debt, the first thing she needs to know is what type of repayment plan is she going to be on. Is she going to be on an income-driven repayment plan or is she going to be on an interest-driven repayment plan? Two very different types of repayment plans.

She also needs to know what type of student loans she has. And this is where I was going to go with the education. Now, some of these college students don’t even know what type of student loans they actually have, my daughter included. Yeah, Tina, it’s funny you had mentioned about checkbooks. I know that years ago when I worked at Cambridge, we would go into the high schools when the world was flat and meet people and we’d talk about checkbooks.

And you know what the students would say? Do they even have checkbooks anymore? They go, what’s that book? Exactly, education. Knowing what type of student loans you have is key in number one.

So both of these process, just so I can understand, our partner Cambridge Credit Counseling, both these scenarios, those were free counseling sessions? Correct. Absolutely. Counseling is always free at Cambridge Credit Counseling. When you were just to call into a student loan counselor and ask questions, absolutely.

Even before the coronavirus, there were report after report after report of people graduating college, moving back in with family members because they couldn’t possibly afford student loans and bills and rent and all the things that you would have as far as normal expenses are concerned. I can relate to that to the fullest. My daughter went off to college. I cried, I was going to miss her. She moved back home, I cried even more that she came back.

How about, Gord, how about putting off getting married? That’s a big one because of student loans, not buying a house. It’s putting this whole generation and couple generations behind. You know, we’re really gaping them. It’s preventing them from growing up and being adults.

Well, in our next segment, we’re going to get into this a little bit so we can give people the basics of what to look at in the student loan space. Tina Marie, as always, thank you so much for joining me every week to give these positive stories to our consumers. Again, coming up, I’m here with Todd from Cambridge Credit Counseling, the student loan counseling manager. I’m your host, Gordon Oliver, with the Cambridge Connection. We’ll be right back.

Public service loan forgiveness explained

Hi, everyone. Christopher Vialli, President of Cambridge Credit Counseling. Here to tell you if you’re trying to figure out if you’re in the best student loan repayment plan, you need to speak with an expert. Todd Friedhaber has been helping consumers navigate debt situations for over two decades. He is the Cambridge Resident Pro at Student Loan Repayment Options.

Thousands of consumers have participated in his seminars and you can call him to learn more. And you can call in for a one-on-one free consultation. The federal student loans have been in moratorium for the past year and a half, but will start to come due again starting in February. So get a jumpstart. Call 1-800-CAMBRIDGE and ask to speak with Todd.

♪ 1-800-CAMBRIDGE ♪ Welcome back, everyone. I’m your host, Gordon Oliver, with the Cambridge Connection, joined by special guest, Todd, who is the Student Loan Counseling Manager at our partner, Cambridge Credit Counseling. And we’re here to talk about the myths of student loans and how things work as far as loan forgiveness are concerned. So Todd, welcome to the show again. Thank you for joining us.

This is very important information we’re sharing. Absolutely, thank you for having me on, Gordon. All right, so let’s get into it. Moratorium on student loans since coronavirus. What is it, March of last year?

Correct, March of 2020 is when the moratorium went into effect for all student loans that are owned by the Department of Education. So that’s including all direct federal student loans. And from 2010 moving forward, all new loans that were being issued through the Department of Education were direct loans. Okay, so let me stop you right there. So if you got your loans from 2010 forward, you have direct loans if they were from the Department of Education?

2010, yes, Department of Education. Okay, why is that important? Because you need to know what type of federal student loans you have because not all federal student loans will qualify for all the different benefits that the Department of Education provides and not all federal student loans will qualify for the different repayment plans. So first takeaway, if you went to school before 2010, it’s a very good likely chance that you have one of several. You could have had what’s called the older FFEO loans, federal family educational loans.

You could have had a Perkins loan or you could have had a direct loan. And all of those qualify differently for different programs? Exactly. Okay, so if that’s the case, what do you do to find out what kind of loans you have? Well, you have to go and you have to log into the federal student aid site and you have to download your NSLDS file to tell you what type of federal student loans you have.

You can also contact your servicer and find out what type of federal student loans you have. If a listener looks up NSLDS, they’ll find it? National Student Aid Data System. org and log in with your FSA ID and your federal student loans will come up. So there’s several ways.

So have you seen bad things happen to people because they didn’t look into what loans they have thinking they were on certain programs? Absolutely, I constantly have to tell people, I’m sorry, I know that you’ve been paying for about seven years, but none of your payments have counted toward the Public Service Loan Forgiveness, one of the two forgiveness programs that the Department of Education has, because you have the wrong type of loans. I knew you were gonna go there. Public Service Loan Forgiveness obviously has been a mess since it started. That program started in 2007, am I correct?

Yes. So let’s go through what it would take to be eligible to get your loans forgiven from 2007 to 2017. Okay, so to be eligible for the Public Service Loan Forgiveness, several things have to happen. You have to have direct federal student loans, you have to be working for a qualified employer, and you have to be on the right type of repayment plan, an income-driven repayment plan. If you’re just joining us, I’m your host, Gordon Oliver, with The Cambridge Connection.

We are here talking about Public Service Loan Forgiveness. Everyone knows it’s a mess. It’s also being reconfigured, as I understand it. I just saw a headline today that they were talking about there’s gonna be some major changes, but we keep seeing these things, such as everybody’s been hoping that because the Biden administration came in, that their loans were gonna get forgiven, and that narrative has been going on for 12 to 18 months, and lo and behold, has nothing to do with the real process at the moment. So the real process, again, is what?

Three things, that’s what I heard. Correct, I have to have the right type of loans. Okay, and you find that out where? gov, I can go to my servicer’s website, and I’ll be able to see if it’s owned by Department of Education. I need to have the right type of employer, a non-profit or like a non-profit, and I have to be on the right type of repayment plan.

Non-profit, city, state, government official. Exactly, I’m in the military, I’m a firefighter, I work for the city of Chicopee, something like that. I build houses for Habitat for Humanity, something like that. Well, here’s why it’s important that people call 1-800-CAMBRIDGE to talk about this, because you can help people learn all of these steps to make sure that they’re in a good place. Knowledge is very important, and pretty soon we’re gonna have payments gonna start coming due.

One of the, you had asked some of the things about this moratorium. Well, there hasn’t been payments for, well, since March of 2020. I haven’t had interest accruing, I haven’t had to make payments. Even though I may not have made payments, I am still getting credit for public service loan forgiveness after I’m on an income-driven repayment plan with the right type of loans, right type of employer. It’s 120 payments until forgiveness.

And if not, then you have to find out what plan that you need to be on to pay your loans off if you’re not going to be eligible for such a plan. Absolutely, because imagine paying interest for 20 years. And it’s happening all the time. Yes, it is. That’s the average amount of time it takes to pay off student loans, 20 years.

Absolutely. So to our valued listeners, I want to remind you that you can call 1-800-CAMBRIDGE to get in touch with either Todd or one of the counselors at Cambridge Credit Counseling for a free session to understand how to manage and deal with your student loans. There is so much information to talk about in this segment that we can’t possibly get to. But Todd, I wanted to touch on one more thing that I know has been a very big problem. People that had loans before 2010, those FFEL loans, Family Federal Education loans, what does a person do if they have those and none of their payments are...

qualifying for loan forgiveness. You kind of asked me a loaded question here because one is there is no one cookie-cutter answer for everything. You really have to speak with a counselor, know what all your options are to have the best decision, but you would want to consolidate those FFEO loans into a direct consolidation if you are going to pursue public service loan forgiveness. So they can’t qualify as they are. Exactly, because they’re the wrong type of loan.

So one of the things you could do is combine them into a direct consolidation loan now. The only thing you can do since 2010 is a direct consolidation. So don’t worry about messing anything up. So if you know family members or friends that are either graduating college or graduated college and have student loans, I strongly recommend you call Cambridge Credit Counseling at 1-800-CAMBRIDGE and speak to Todd or one of the student loan counselors there. So that’s a wrap for this week.

Closing remarks and show promotion

Thank you to my co-pilot Ariane, Tina Marie with the Cambridge Credit Success Story, and my special guest Todd Friedhaber, the student loan counseling manager at Cambridge Credit Counseling. Thank you to everyone out there tuning in. 5 FM and 1400 AM at 930. org. Follow me on Twitter at GORDONOCARES, that’s G-O-R-D-O-N-O-C-A-R-E-S, and Facebook, Gordon No Cares.

If you’d like a free consultation with a counselor from Cambridge Credit Counseling, just call 1-800-CAMBRIDGE. Counselors are always standing by to answer your credit and debt questions. And seriously people, it’s a free call to 1-800-CAMBRIDGE. Hey everyone, Gordon Oliver here and I’m the host of the brand new Saturday morning show, The Cambridge Connection. 30 AM we’ll spend 28 minutes together that will change your relationship with money for the better.

I’ve been a financial counselor for 20 years and I’m here to get you excited about being in financial control. Join me next Saturday right here on The Cambridge Connection. Got student loans? 30 AM right here on WHMP.