In the event that you had to take student loans in order to complete your education, the government has some good news for you. Two new programs began in July 2009 that might help you to get that student debt paid in full.
The initial program is called income-based repayment or IBR. This new payment option for student loans may help you to keep the payments on your student loans affordable. For some persons, that means that you will have to pay nothing on your student loans if your income is underneath twenty thousand dollars per year. The majority of people will qualify for payments of less than ten percent of their income
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.
Also, 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.
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 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.
The types of student debt covered include Stafford loans, Grad PLUS loans or even consolidated loans that are included in the Direct Loan program. If you have loans that are a part of the Guaranteed loan program, you need to switch them to the Direct Loan program to qualify.
Graduates that are still using the standard ten year payback plan may feel that they are drowning in debt. Making the switch to one of these programs can lower your monthly payments and allow you to finally see the light at the end of the tunnel. By keeping student loan payments current there will come the day when your student debt has finally been paid in full.
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