Latest News and Reviews

New Income Based Repayment Program To Help College Graduates Repay Student Loans

On an average, $22,000 of student loan debt rides on the shoulder of a college graduate. As an aside, the job market is getting increasingly dubious. For them, this quandary is a time to learn that a degree is not always self-supportive. If you have graduated recently and are finding it difficult to repay your dues then perhaps brighter tomorrow is ahead. Come 1st of July and a fresh Income-Based Repayment program will minimize the loan overdue of college graduates. Those who are high on debts and pretty low with job emoluments would benefit most. If your debts exceed your annual income then qualifying would cease to be an issue.

Income Criteria : The program mulls over income earned above 150 percent of the stipulated Federal Poverty Level.  For those who are single in continental US, the very same amount happens to be $16,245. Of this stipulated amount, less than 15 percent shall go towards student loans. If your income is less than 150 percent level of federal poverty then you are deemed to have no discretionary income as such and your overall payment would be tantamount to zero. For those who earn more, payment would be adjudged via a sliding scale. There would be cases where the payment would fall short of covering the loan interest, in such an event, the unpaid interest would accrue but wont accumulate as in the case of conventional programs pertaining to deferrals.

What You Need To Do : Applications will be there for the taking from July 1. The IRS will get a detailed script on your previous year’s income. In case you have more than one fixed rate loans charging some 6.8 percent then you might chose to consolidate them. In the case of variable interest loans taken prior to 2006, such loans would help you qualify for a lower interest rate in July when seen under the light of consolidation interest rate put forth by treasury auctions. For those who have lost their job and are not able to pay their previously consolidate loan, they might also qualify for the program base on their current income.

One shall be eligible for the Income-Based Repayment program even if he or she falls behind on the student loans. For those who have filed a bankruptcy protection, this program might be the best way to clear their loans since bankruptcy will not erase student loans.

The program has been brought up tentatively as of now but it has very best intentions to alleviate the misery of those trapped in exorbitant student loans and thus boost up public service. If everything going as planned, it is hope that education will help more people securing better jobs and eventually help them repay their loan easier.