Student Loan Debt Requirements: Scenarios and FAQs
Updated: 09/12/2022
To support our customers in understanding student loan requirements, see below for scenarios and FAQs related to the following student loan topics:
- Student Loans in Deferment or Forbearance
- Student Loan Payment Calculation
- Income-driven and Graduated Payment Plans
- Derogatory Student Loan Debt
- Student Loan Debt Paid by Others
- Student Loan Cash-Out Refinance Option
Note: Changes since the last update are marked either NEW or UPDATED. Minor (non-substantive) wording, number, and heading changes are not marked.
Student Loans in Deferment or Forbearance
Scenario: Student loan in COVID-related automatic forbearance.
Scenario: Student loan in deferment or forbearance.
- If a student loan is in deferment or forbearance, can the payment amount be excluded for qualifying? *
Scenario: Multiple student loans in forbearance.
Scenario: Previous payment before automatic loan forbearance. Credit report reflects income-based repayment.
Student Loan Payment Calculation
Scenario: Credit report reflects $0 payment or is missing. Confusion with credit report payment compared to outstanding loan balance.
Scenario: Borrower has multiple student loans and repayment terms are unknown.
Scenario: Credit report does not reflect correct payment.
Scenario: Less than 10 months payments remaining.
Scenario: Student loan forgiveness, cancellation, or discharge.
- Can a student loan be excluded from the DTI ratio if it was forgiven, canceled, or discharged? * UPDATED
Income-Driven and Graduated Payment Plans
Scenario: Student loan on income-driven repayment (IDR) plan.
Scenario: Income-driven payment plan is expiring. Graduated payment plan is changing.
Scenario: Income-driven payment plan shows $0 on the credit report.
Derogatory Student Loan Debt
Scenario: Student loan is in collection or garnishment.
Scenario: Student loan is past due.
Student Loans Debt Paid by Others
Scenario: Excluding student loan debt paid by others.
Scenario: Partial student loan payment paid by others.
Student Loans Cash-Out Refinance Option
Scenario: Paying off a student loan with a cash-out refinance option.
- What is the student loan cash-out refinance option? *
- What is required when paying off student loans with a refinance?