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Does Student Loan Money Go To Your Bank Account
You’re dreaming of snorkeling in Australia’s Great Barrier Reef, but what if you have problems getting a passport for your long-awaited adventure? The State Department may deny issuance of a passport due to a variety of legal and financial issues. If you fall into one of those categories, the best solution is to learn how to rectify the situation, giving you the chance to plan your vacation without lingering doubts or concerns.
True or false: Convicted felons or warrant recipients can’t receive passports.
This statement is somewhat true. While passport applications don’t dig into anyone’s criminal history, felons convicted of international drug trafficking or treason are prohibited from obtaining a passport or traveling abroad. Applicants may also get denied if they have a federal warrant out against them, have outstanding prison debts or are currently on parole or probation. In some instances, subjects of subpoenas in federal cases may be barred from receiving passports, as well.
True or false: You may be denied a passport if you owe alimony or child support.
True. If an applicant owes $2,500 or more in child or spousal support, she is not eligible to get a passport, but an existing passport is not revoked. Under the Passport Denial Program (PDP), the Federal Office of Child Support Enforcement (OCSE) places the offender on a list and submits her name to the State Department , the agency in charge of issuing passports. Debts must be fully repaid to a state’s child support agency before the OCSE removes the applicant’s name from the PDP. List removal may take up to two to three weeks. Travelers may be removed from the denial list if the applicant filed for bankruptcy protection, is the subject of a foreign government’s extradition request or has an immediate family member living abroad that is very ill or close to death.
True or false: You may be denied a passport if you owe back taxes.
True. Starting in December 2015, the Fixing America’s Surface Transportation Act (FAST) allows the IRS to supply the State Department a list of people who owe federal back taxes. If the applicant has a large delinquent tax debt, defined as any amount over $50,000, his passport application may get denied. Travelers have 90 days to get back in good standing. Individuals who already settled their debt or have made repayment installment agreements with the IRS are exempt from the denial program.
True or false: You can’t get a passport if you have outstanding student loans.
False. Applicants will not be denied passports from the State Department even if they have outstanding or delinquent student loans. Travelers may encounter problems, however, if they have not repaid a loan to the government for the costs of providing emergency evacuation, medical or rescue services to the applicant in a foreign nation.
Student loans can prevent you from getting a passport.
If you’re in a situation where you need to get a passport, it’s important to know how student loans can affect your ability to travel.
It’s possible that you’ll need to provide documentation of having made payments on your student loan(s) before you can get a passport. This means submitting proof of payment, such as a letter or statement from your lender that confirms that the loan is current and paid in full, even if it isn’t in default.
If you don’t have this documentation ready when you apply for your passport, there are several ways to get it:
- You can request that your lender send it directly to the embassy or consulate where you plan to apply for your passport. It should arrive within about 2 weeks of submitting an official request letter on their website (or by mail). You will also need to submit proof of identity and citizenship when requesting this documentation from the lender.
- You can also request that they send it directly to the embassy or consulate where you plan to apply for your passport—but only if another person has already received approval for their own passport under this same program without sending documentation from their lender beforehand.
Your passport application should not be denied for defaulting on a student loan. There are other reasons why the U.S. Government can deny a passport application, i.e. outstanding child support over a certain amount, pending criminal warrants, etc, but defaulting on a student loan is not one of them.
In fact, if you are currently in default on your student loans, but have been making payments for the past six months and have made arrangements to pay off the balance within the next few years (or if you have already paid off the loan), then you can get a new passport with no problem!
can you get a passport if you have debt collections
Passports and Seriously Delinquent Tax Debt
If you have been certified to the Department of State by the Secretary of the Treasury as having a seriously delinquent tax debt, you cannot be issued a U.S. passport and your current U.S. passport may be revoked.
If you are overseas you may be eligible for a limited passport good for direct return to the United States.
We suggest that if you have seriously delinquent tax debt, you contact the Internal Revenue Service (IRS) to resolve your debt before applying for a passport. If you do not resolve your tax issues before applying for a passport, your application will be delayed or denied.
If you have seriously delinquent tax debt and have already applied for a new U.S. passport, we cannot issue a new passport to you until you have resolved your tax issues with the IRS.
how can you find out if you are on the passport denial list
Office Hours
Monday to Friday, 8:15 am to 4:45 pm, except District holidays
Connect With Us
400 6th Street, NW, Suite 8300, Washington, DC 20001
Phone: (202) 442-9900
TTY: 711
Email: cssdcustomerservice@dc.gov
Passport Denial
All cases which receive full services from the Child Support Services Division (CSSD) are eligible for passport denial once the arrears owed in the case are over $2,500.
Why Is a Passport Important?
If you do not have a valid passport, you cannot travel outside of the United States.
How Does the Passport Denial Process Work?
Once the amount of overdue support that you owe exceeds $2,500, CSSD will submit your name to the Office of Child Support Enforcement (OCSE), the federal child support agency. OCSE then forwards your name to the U.S. State Department, the agency which issues passports. If you apply for a new or renewed passport, your application will be denied and you will be instructed to contact CSSD.
CSSD will also mail you a letter informing you of CSSD’s intent to submit your name for passport denial.
Notification
CSSD will mail you a notice if your name is being submitted for passport denial. The notice will contain the following information:
- The amount of arrears you owe
- Information regarding your right to dispute the amount of arrears owed
- The right to request an administrative review of the decision to submit your name for passport denial
- A statement indicating that the U.S. Secretary of State will deny your application for new a passport and may revoke or restrict the use of a passport previously issued to you.
- Information about how and when to contact CSSD in order to dispute the matter or to make payment arrangements so that your passport may be reinstated
What Happens Next?
If you disagree with the CSSD’s decision to deny or restrict your passport, you have the right to contest the decision and to request a review.
How to Contact CSSD
- CSSD is eager to assist you if you have any questions concerning a child support matter. You may contact CSSD Customer Service Unit at (202) 442-9900.
- You may visit the CSSD office at 441 4th Street, NW, 5th Floor North, Washington, DC 20001.
- Once you contact CSSD, you will be given the Child Support Objection Notice form to complete. Upon completing the form, you should return it to CSSD.
- You must also submit evidence with the Child Support Objection Notice form in support of your claim.
- CSSD will document receipt of your form and your intent to contest the decision.
- CSSD will conduct a review of your case to determine whether or not your name should be removed from the Passport Denial List.
What Kind of Evidence Do I Need to Submit?
- Cancelled checks
- Copy of money orders
- Payment receipts
- Copy of your child support order
- Any other documentation of payments made, including specific dates
When Will I Hear About a Decision on the Review of My Case?
- CSSD’s Enforcement Unit will provide a response to your Objection Notice within 45 days from the day CSSD receives the Notice from you.
- You will receive a final copy of your Objection Notice completed by a CSSD Enforcement Specialist informing you of CSSD’s decision.
- If CSSD determines that your name was placed on the Passport Denial List in error, CSSD will remove it. This could happen if an incorrect arrears amount was reflected in your account.
- If your name was not submitted in error, it may still be removed if you agree to a payment arrangement under the following terms:
– Pay a lump sum that reduces your arrears to zero; and
– Continue to make regular payments in the amount of your current support.
Hardship
You may still receive a passport even though your arrears exceed $2500 if you can show hardship. Examples of hardship are:
- Traveling overseas to visit a relative with a serious illness
- Traveling overseas due to the death of a relative
You must provide proof of the hardship in order for the claim to be granted.
Student loans can prevent you from getting a passport, but there are some things that you can do to avoid this problem. First, it’s important to know how much money you owe in student loans and make sure that the amount is correct. If your loans are incorrect or missing, then you will need to contact your lender and get them fixed as soon as possible. Second, if you have any outstanding fees or penalties on your account, then you should pay these off before applying for a passport or renewing one. Finally, if you have multiple loan accounts with different lenders then make sure that all of these lenders have been notified of your application process ahead of time so they don’t reject it later down the road due to lack of communication between themselves and their partners in crime (i.e., other lenders).
Can You Get Student Loans Without a Bank Account?
A significant number of Americans do not have a bank account, or even access to banking services.
According to the Federal Deposit Insurance Corporation (FDIC), approximately 6.5% of all American households were “unbanked” in 2017. This represents approximately 8.4 million households.
An additional 18.7% of all U.S. households (24.2 million) were underbanked, which means they have a checking or savings account, but obtained other financial services outside of the banking system.
These numbers demonstrate just how many Americans are not involved in the traditional banking system. When it comes time to apply for college, this may create a dilemma: can you get federal or private student loans without a bank account?
The answer lies in how student loans are disbursed and how much money a borrower takes out for college.
Student Loan Disbursement Process
The good news is you do not need a bank account to obtain a student loan. As a general rule, neither federal nor private student loan applications require you to provide proof of a bank account in order to be eligible for a student loan.
>> Read More: How (and When) to Apply for Student Loans
However, because private student loans, unlike federal student loans, are approved based on the borrower’s creditworthiness, the lack of a bank account may be a factor in the qualification process.
Money Is Sent Directly to College or University
If you are approved for a federal or private student loan, the money is disbursed directly to your college or university. In other words, whatever money you borrowed to pay for your tuition, fees, and other expenses will be paid directly to your school by your lender. Because of this method of disbursement, borrowers do not need a bank account to get student loans.
However, there may be a hurdle for students who take out more money than is required for their tuition and other fees. This is commonly done by students who need the extra funds to pay for living expenses, books, and other costs associated with attending college (like buying a computer or plane tickets to travel home).
Then, Excess Typically Sent to Bank Account
Once the funds are disbursed to your college or university, the excess is typically electronically transferred to the borrower’s bank account by their school.
For students without a bank account, this can present a problem. Without a bank account, they may not have access to those extra funds. Fortunately, there may be some options for borrowers in this situation.
How to Set Up a Bank Account
If you don’t have a bank account to accept an electronic transfer, the first step may be to set up a bank account for this express purpose. Many banks allow clients to set up accounts with low initial deposits. In college towns, banks, and other businesses often run specials just for students.
Check to see if there are any deals on bank accounts for students that would allow you to open an account specifically for your transfer of excess student loan funds.
See If You Can Receive a Check Instead
Alternatively, talk to your college or university about giving you a check for the excess funds. You could then use this check to open up a bank account. Other options may include cashing the check at a check-cashing store (beware of high fees), or using the money to buy a reloadable debit card.
While it may be more challenging to get a student loan without a bank account, particularly if you are taking out extra money to cover living expenses, it is possible. Don’t let your lack of participation in the financial system stop you from achieving your dreams!
Should I use my savings or take private student loans to fund my degree?
How to prepare your finances before Grad school:
Wondering how to pay for college with no savings? Few people have enough money in savings accounts to pay for their international masters tuition outright.
The majority of international grad students have some savings and should continue reading – even if you don’t have enough savings to pay for university.
The question may become relevant while preparing your international grad school finances – or while you’re in the repayment cycle of your student loan.
Is it smarter to use savings or a private student loan?
‘Should I take a student loan?’ is a thought which plagues many masters degree applicants. You might want to use the money you’ve saved, or you might want to consider some of the best student loans for graduates. The question of taking private student loans or using savings to pay for your masters degree resembles a much more common question:
Should I use savings to pay for credit card debt?
If you put some numbers to this question, it becomes easier to understand how similar these questions are.
Use a parallel example to view options
Pretend you have $6000 in credit card debt and $6000 in your savings account.
Current financial logic suggests you use your savings to pay your credit card debt.
Why?
You’re likely paying around 18% per month on the credit card and earning something closer to 2% on your savings.
Essentially, you’re spending $1080 on the debt while you’re earning a mere $120 on your savings.
If you calculate your options based just on the numbers, your best choice is obvious.
But, the world isn’t just numbers.
There’s a reason for savings accounts; you want a secure home in a safe neighbourhood, or you want a buffer in case you lose your job. There are countless reasons and motivations.
Taking out student loans for grad school is something countless people do, but each case is unique and you need to assess your own scenario before you consider what to do.
This isn’t a black or white question with a choice of two answers. There is plenty of grey area in the middle; you don’t need to use all of your savings to pay off all of your debt.
Throwing $5000 from the savings account towards the credit card would reduce the interest (at a theoretical 18%) down to $180, and while this would only be earning $20 on the savings account, you’d be saving $800 a month.
These equations are never that smooth. There are complexities and accumulated interest, and maybe you need to dip into that $1000 because you need to replace the brakes on your car.
Priorities determine the use of savings or international student loans
We can’t tell you, even in this hypothetical situation whether you should put $4000, $4500, or $5000 towards debt. We won’t even tell you whether you should put any of your hypothetical savings towards debt.
Maybe you need that money in the bank because job security isn’t the best at the moment. Maybe a family member is ill.
Whether you would keep your savings or pay off your debt is totally up to you. It’s entirely possible that you won’t sleep well without a large cushion in the bank. Or, maybe, the debt is keeping you awake at night.
The point is that it all boils down to your priorities and the actual figures you have in front of you.
So let’s take it back to a realistic ‘savings versus international student loans’ question.
Imagine you’ve been admitted to your dream school and they’ve even awarded you a generous scholarship package. Imagine, too, that your company is willing to sponsor a chunk of your tuition and your parents can’t wait to gift some money towards your international degree.
Sure, this sounds rather too good to be true – and for most students, it usually is. But, just imagine that, after piecing together all of these funds you have a choice of using $15K in savings or borrowing the same amount in private student loans. Which is the better option?
The obvious and immediate answer would be to look at the figures and work out some calculations as we did with the hypothetical credit card debt.
But, the world is still not black and white, and neither are these equations.
You’ll still need to consider your priorities – and some questions that relate to life outside of your bank balance. ‘Should I use a savings account or a student loan?’ is a question for which there is no one-answer-fits-all approach.
If you decide to take a student loan, take a look at some of the best student loans for graduates offered by Prodigy Finance.
Useful questions for savings vs loan decisions
There are dozens of queries that can help you with these decisions, but you should probably start with these.
Is there job security in your field?
If there is a high and rising demand for the skills you’ll have after graduation, you can really spend some time thinking through the international student loan versus savings question.
If you’re almost certain that you’ll find a fantastic job and do so quickly, you may want to hold onto as much of your cushion as you can until you do so.
Will you get a high-paying job?
If you think you would be able to make higher payments or repay your international student loan sooner because of your earning potential, a savings balance may allow you to be picky about the position you accept after graduation. In that case, you might want to start looking at some of the best student loans for graduate students.
Where are your savings?
International students, especially those from developing countries, know that anything can happen when it comes to currency exchange.
If you have a bank account in a strong, relatively stable currency, you may want to hold on to that. If your account is in a country that’s recently dealt with depreciation against stronger currencies, you may want to use as much of this money as possible to avoid double losses later on. A fluctuating exchange rate can be a huge influence in your decision of using your savings or taking student loans for a masters degree.
Do you have a safety net?
If you can avoid trading in the last of your safety net for those first few months when you’re still looking for a job or settling into one, you probably want to do so.
There are moving costs and emergency expenses to consider. It’s worth remembering that in any of these cases, you can take an international student loan and repay it early using your savings, as long as your loan provider allows for early repayment. (Prodigy Finance does.) In such a case, taking out loans for grad school might not be a bad idea.
But, these are merely theoretical questions, answers, and situations; none of this should be taken as financial advice. You’ll need to establish your priorities and consider your individual goals before using your savings or finding the best student loans for graduate students.
Considering your options? Why not see why these international MBAs chose student loans:
If you have the choice between using savings or taking private student loans, you should consult a trusted (and registered or licensed) financial manager. A masters degree is an investment, after all, even if it feels like an expenditure at the moment.
If you do choose to go after some of the best student loans for graduate students, one question you might ask yourself is, ‘What can I spend my student loan on?’. Well, you can use your student loan to cover your school tuition and fees, plus all other expenses included in the cost of attendance at your school. These expenses include paying for books and supplies, transportation costs, and housing utilities, among others. However, it’s important to budget and spend your loan wisely to cover your necessary living expenses.
Do you have to pay student loans in grad school?
You usually have the option of deferring payment on your student loans while you’re in graduate school. This means you will not have to pay off your student loan while you’re still in grad school. With Prodigy Finance, you only start repaying your loan 6-months after classes end.
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