Student Loan Help - Getting the Assistance From Government Programs
A new federal program starting in the fall offers hope and relief to millions of students and graduates that have major educational debts, in other words, you will be able to get student loan help. As of July 1, if you have federal loans, you can ask the government to place limit your payment amount to 15% of your income. This is a new income based program that is being offered to those with debt.
For the majority of borrowers, their monthly payment will be the 15% difference of the budget allowance, set by the government, and their current income. If your income falls within one and half times the poverty level, chances are you won’t have to pay anything.
Complete and total forgiveness of your student loans after the repayment period expires is offered through this program. The time that you will have to pay varies from 10 years, for those in public service jobs to 25 years for those with low income. As long as you abide by the rules and make your payments on time, you will eventually be able to apply to have the remainder of the loan forgiven.
Most lenders have offered income based repayment for years but don’t mistake this for the government program now in place. Make sure to only apply for federal loans in order to take full advantage of the program. When you are looking into obtaining student loans, make sure to comparison shop. Contact your lender to apply for the program if you are no longer attending school.
If you are in a public service job, make sure to consolidate your loans and then apply for the program. Private lenders will not offer this program to you. You will need to keep records of your payments and the like so that at the end of the 10 year period, you can apply for the forgiveness portion of the loan program. You are going to have to provide proof that you followed all the rules in order for your loan to be forgiven.
As with any program, there are some consequences involved. If your payments are so low that the interest isn’t even covered, the amount of your debt will grow until you reach the time that you can have it forgiven. You may have to taxes on the forgiven amount as well unless your career is in the public service field. If any of your loans are in default, you will not qualify for the program.
There are several types of loans that the program does not cover. These loans include private, alternative or signature loans. Parent loans are not covered either.
If your monthly payments total less than 15% of your income, you will not qualify for the program either.
Certain groups are lobbying Congress at this time to make changes to the loan program. So, if you don’t qualify now, you may qualify later.
Student loan refinancing may be the way out of debt. To refinance student loans, visit Pay-Off-Student-Loan.com
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