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 that is being offered is the income based repayment program or IBR. This new option for paying of student loans can help to keep payments affordable for student loans. For some qualifying persons with low incomes, you may not have to pay anything at all. Nearly all debtors will pay less than ten percent of their income for student loans and the cap is fifteen percent.
For persons enrolled in this program, student loan debts are forgiven after twenty five years of reduced payments. The time can also include any months your student loan was in deferment as well as times when income is less than the one and one half times the federal poverty guidelines, based on family size.
In addition, interest that is in excess of the minimum payment will be paid by the government on your behalf.
Your student debt must meet certain criteria, so be sure to read the government website for more information and to see if you qualify.
The second program is designed for persons who work for non-profit or government organizations. This program offers forgiveness for student loans that are still outstanding after you have worked for a qualifying employer and paid on the loan for ten years.
Examples of qualifying employers include government agencies and 501(c)(3) nonprofit agencies. Again you will want to check to see if your employer qualifies you for this program. State, local, tribal and federal organizations do qualify.
The time period is retroactive until October first 2007 so older payments may count toward the total of 120 payments. The earliest anyone could qualify for debt forgiveness is October 1, 2017. So that means that in just over eight years you could be finished paying for student loans forever.
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 back student debt under the standard ten year program, you could feel that you are drowning in debt. By switching to one of these programs, you can lower the amount of your monthly payment and see a light at the end to the tunnel. Be sure that you keep your student loan payments current and look forward to the day when they are paid in full.
The first program that is being offered is the income based repayment program or IBR. This new option for paying of student loans can help to keep payments affordable for student loans. For some qualifying persons with low incomes, you may not have to pay anything at all. Nearly all debtors will pay less than ten percent of their income for student loans and the cap is fifteen percent.
For persons enrolled in this program, student loan debts are forgiven after twenty five years of reduced payments. The time can also include any months your student loan was in deferment as well as times when income is less than the one and one half times the federal poverty guidelines, based on family size.
In addition, interest that is in excess of the minimum payment will be paid by the government on your behalf.
Your student debt must meet certain criteria, so be sure to read the government website for more information and to see if you qualify.
The second program is designed for persons who work for non-profit or government organizations. This program offers forgiveness for student loans that are still outstanding after you have worked for a qualifying employer and paid on the loan for ten years.
Examples of qualifying employers include government agencies and 501(c)(3) nonprofit agencies. Again you will want to check to see if your employer qualifies you for this program. State, local, tribal and federal organizations do qualify.
The time period is retroactive until October first 2007 so older payments may count toward the total of 120 payments. The earliest anyone could qualify for debt forgiveness is October 1, 2017. So that means that in just over eight years you could be finished paying for student loans forever.
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 back student debt under the standard ten year program, you could feel that you are drowning in debt. By switching to one of these programs, you can lower the amount of your monthly payment and see a light at the end to the tunnel. Be sure that you keep your student loan payments current and look forward to the day when they are paid in full.
About the Author:
Dawn Enstruthe writes for website Ginko Financial which has details of Chicago credit counseling and home refinance after a bankrupcy.
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