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 those who qualify, the average payment will be 15% of the difference between the base budget allowance and their current income. Then again, you may not have to pay anything if you fall within the one and half times the poverty level.

If you are in a public service job, after 10 years of paying on your loans through the income based program, the rest of your debt will be erased. For those who are not in public service jobs but stay current on the income base payments for 25 years will have their debt forgiven as well.

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 your loans are through a private lender, chances are they will not offer this program to you. So, before you apply for the program, locate a federal consolidation loan program to combine your loans. Once you qualify, keep track of the payments you make and any other necessary information. When the repayment period is over, you are going to have to prove that you followed the guidelines in order to have your loans forgiven.

There are some downsides to the program though. For instance, if you qualify but your payments don’t cover the interest portion of your loan, your debt will continue to increase until you reach the forgiveness period. There is a chance that you will have to pay taxes on the forgiven amount if you are not in a public service job. Also, if you have defaulted on your loans, the program will not lower your payments. If you have gone into default, you will not qualify for the program at all.

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.

Finally, if your income is high enough that your loans are less than 15% of your income, regardless of what other debt you may have, you won’t qualify 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 best option for you. Get the help you need to refinance student loans at Pay-Off-Student-Loan.com

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