Obtaining Student Loan Help Through Government Programs

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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.

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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.

In order to take advantage of the program, limit the amount of money you borrow to federal student loans. As with any loan, make sure to research the loans offered. If you are no longer in school, contact your lender to apply for the income based program. Make sure to apply for the correct program and not one that sounds the same. Some of the similar sounding programs are referred to as Income contingent repayment or income sensitive repayment.

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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.

There are a few things that you should be aware of with this program. If your monthly payments are so low that they don’t cover the interest, the amount of your loan will continue to grow until you qualify to have it forgiven. Taxes may have to be paid on the forgiven amount unless you work in the public service arena. If your student loans are in default, you will not qualify.

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The program does not offer coverage to certain types of student loans. Alternative, private, signature or parent loans cannot be included.

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 ideal way to get our of debt. Get help to refinance student loans at Pay-Off-Student-Loan.com

categories: student loan help,student loan,loan,debt,personal finance

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