Subscribe Feed (RSS)Many people have to use student loans to complete their education. If you were one and are now faced with student debt, the federal government has some very good news for you. There were two new programs that began in July 2009 that can help you to pay your student debt in full.
The first program is called income based repayment or IBR. This option is for student loans and can help to reduce your payments to the place where they are affordable. That means that some people with low incomes will not have to make a payment until their income increases and that nearly everyone will qualify for payments that are less than ten percent of their income. Only those with incomes over 60, 000 per year will have to pay more than ten percent of their income on student loans.
If you are enrolled in these programs, and still have debt after twenty-five years of payments, the debt is then forgiven. Time that your loan is in deferment or when you are not required to make payments on the student debt are also included in the twenty five year period required for debt forgiveness.
Additionally, if your interest payment is more than your required payment, the government will pay the additional interest for you.
You will find that there are some special requirements for this program, but be if you qualify, it can save you money.
The second program is for persons that work in certain industries. This program offers forgiveness of any student debt that is still outstanding after you have worked for ten years at a qualifying employer.
To qualify for this program you must work for a government agency, which may be tribal, federal, state or local) a 501(c)(3) agency or the Peace Corps. Other organizations may also qualify so check out the website for more information.
The law is retroactive, so payments you have made since October 2007 will count toward the ten year time frame. Debts could be forgiven by October 2017 for some workers. This program can also be combined with the IBR.
Student debts that are covered include all Stafford loans and Grad PLUS loans. If consolidated loans are included in the Direct Loan Program, they are also included. Guaranteed loan program debt will have to be switched over to Direct Loans in order to qualify.
If you are still paying your loan on the standard program, the debt can appear devastating. Ensure to see other options that are accessible to you that can lower your monthly payments. If you work for a government or nonprofit agency, make sure to see if you qualify for the second program. Always keep you loans current and if you have difficulty in making payments seed a deferment or forbearance.
Dawn Enstruthe is a writer for Ginko Financial which has info on how to become a certified fiancial planner and lowest Chicagoland mortgage refinanse rates.
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