Things Every Student Should Know About Student Loans and Obama Loan Forgiveness
For students who are in the verge of graduating, May is a very important month. You need to think of your student loans aside from thinking your final exams and looking forward to your dream job. You need sufficient cash in order to cover the costs of repaying your student loans after graduation as they start to kick in. It is really difficult repaying multiple loans as compared to only one loan. You might get confused dealing with different agencies, the amount you need to pay and when you should make a payment. Now, repayments can be simplified with a small dose of organization, and all you have to do is to obtain the necessary information so you can write it down or just create a direct debit account so the payment will just be taken out.
One way to reduce your loan is by availing of Federal Direct Loan Program or Obama Student Loan Forgiveness. Obama Student Loan Forgiveness applies to federal student loans but not to private loans. There are a lot of benefits a borrower can get by taking advantage of Obama Student loan Forgiveness such as the ability of consolidating all federal student loans into just a single new loan, and the consolidated loan can be repaid using a preferred repayment plan which is more affordable. The different repayment plans under the Obama Student Loan Forgiveness Program includes standard repayment, graduated repayment, income contingent, income based, and pay as you earn. For standard repayment, a fixed amount is paid by the borrower for the entire life of the loan, basing on the interest rate, term of the loan and borrowed amount. With graduated repayment, you can make lower payments, lower than the standard repayment plan but there is a gradual increase in the amount every two years. The borrower makes payment basing on his income in an income contingent plan, as well as basing from the interest rate, loan balance, and family size. A borrower can make payment basing n the income and family size or fifteen percent of their discretionary income for income-based repayments. PAYE or Pay as You Earn repayment has the lowest monthly payment among the rest of the repayment plans that depends on the borrower’s income or ten percent of the discretionary income.
It will really help you a lot knowing the grace period of your student loan. It is usually six up to nine months depending on the type of loan. This will give you sufficient time to find money to pay your loan. You really don’t have to stick with traditional or standard repayments because there are many options for you, just research more by viewing our website.
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