Yes, the double consolidation loophole for Parent PLUS loans is still available but is expiring, with a key deadline around July 1, 2025, though court injunctions might extend things, creating uncertainty; borrowers need to act quickly, using a mix of paper/electronic applications to get into better IDR plans like SAVE, and might need manual intervention from servicers for final processing as systems catch up with changes.
Normally, parent PLUS loan borrowers can't access the most generous income-driven repayment plans without jumping through loopholes. The popular double consolidation loophole will be closing in 2025. Until it closes, the loophole allows parent PLUS loan borrowers to access the SAVE plan.
How long does double consolidation take? 3-6 months. Each phase takes about 1-3 months to complete. Split into 2 phases, the full process typically takes 3-6 months.
Dave's general recommendation is NOT to use debt consolidation, because it tends to mask the problem. You can't pay off debt with more debt.
The 11-word phrase often cited to stop debt collectors is "Please cease and desist all calls and contact with me, immediately," which leverages your rights under the Fair Debt Collection Practices Act (FDCPA) to halt most communication, though it must be sent in writing via certified mail to be legally binding, and collectors can still notify you of lawsuits.
The Ramsey 25% rule is a personal finance guideline from Dave Ramsey, stating that your total monthly housing costs (mortgage principal, interest, taxes, insurance, HOA, PMI) should not exceed 25% of your monthly take-home pay, preventing you from becoming "house poor" and allowing for savings, investing, and financial freedom. It's a guideline for building a strong financial foundation, not a strict rule, though some find it difficult in high-cost areas.
The "7-year rule" for student loans generally refers to when negative marks, like defaults, are removed from your credit report (around 7 years after the first missed payment or default date for federal loans, 7.5 years for private loans), but the debt itself doesn't disappear and must be paid off; it's also a benchmark in bankruptcy proceedings where federal loans can become dischargeable after 7 years from when payments were due, though proving "undue hardship" is required and difficult.
Your loan can be discharged only under specific circumstances, such as school closure, a school's false certification of your eligibility to receive a loan, a school's failure to pay a required loan refund, or because of total and permanent disability, bankruptcy, identity theft, or death.
Before buying a house and taking on new debt, it's best to get rid of old debt to make leeway for mortgage payments. So, how does debt consolidation affect buying a house? It can help by improving your ability to buy a home. Namely, by improving your credit score and debt-to-income (DTI) ratio.
What Debts Cannot Be Consolidated in Chapter 13 Bankruptcy?
Yes, student loan forgiveness continued in 2025 through existing programs like PSLF and Income-Driven Repayment (IDR) plans, but major changes occurred, with the SAVE plan facing a proposed end (pending court approval) and tax-free forgiveness ending December 31, 2025, meaning new discharges after that date could be taxable, creating uncertainty and urging borrowers to check their status on StudentAid.gov.
What is debt consolidation? Debt consolidation is a good way to get on top of your payments and bills when you know your financial situation: It combines all of your debts into one payment. It could lower the interest rates you're paying on each individual loan and help you pay off your debts faster.
It's partly true: most negative items like late payments and collections are removed from your credit report after about seven years, but the underlying debt often still exists, and bankruptcies (Chapter 7) last 10 years, so your credit isn't entirely "clear" but mostly refreshed from old negatives. The 7-year clock starts from the date of the original delinquency, not when you paid it off or sent to collections, and the debt itself can still be pursued by collectors.
50% of your budget goes to necessities: rent, utilities, transportation, insurance, groceries, etc. 30% goes to wants: dining out, shopping, gym membership, entertainment, etc. 20% goes towards savings and debt repayment: student loans, auto loans, credit cards, emergency savings, etc.
Any borrowers with loans that had accumulated eligible time in repayment of at least 20 or 25 years (240 or 300 months) saw automatic forgiveness, even if they were not at that time on an IDR plan. Borrowers will continue to see the COVID-19 related forbearances counted toward IDR and PSLF forgiveness.
If you're a student from England or Wales, your Postgraduate Loan will be written off 30 years after the April you were first due to repay.
The 3-7-3 Rule in mortgages isn't a loan type but a federal timeline from the TILA-RESPA Integrated Disclosure (TRID) rule, ensuring borrower protection by mandating disclosures within 3 business days of application, a 7-business-day wait between the initial Loan Estimate and closing, and another 3-day wait if significant changes (like APR) occur, giving borrowers time to review costs before committing to a loan.
Suze Orman strongly advocates paying off your mortgage by retirement for financial freedom and peace of mind, but her advice on how varies by situation, often prioritizing a solid emergency fund and retirement savings first, especially if interest rates are low. While she pushes for paying down debt aggressively (even reducing retirement savings beyond the 401(k) match), she cautions against draining savings for low-interest mortgages if it leaves you vulnerable to job loss or emergencies, suggesting you should have a strong safety net before using savings to pay it off.