There are several different federal relief programs borrowers may use to get ahead and finally start saving for their future. Borrowers have the chance to consolidate all Federal Student Loans into one and take advantage of an affordable repayment plan that fits their needs. The Direct Loan Program offers several repayment plans including the following:
STANDARD REPAYMENT: The borrower (you) will pay a fixed monthly payment for the life of your loan. Your new monthly payment will be determined by your borrowed amount, interest rate, and term of the loan. Your interest rate once consolidated will be a combined interest of your previous interest rates per loan.
GRADUATED REPAYMENT: This program the borrower (you) would start with a lower, more affordable monthly payment but would gradually increase every two years by roughly 3% for the remainder of your term. You will end up paying more money in this payment plan because of accrued interest.
INCOME BASED REPAYMENT: IncomeBased Repayment (IBR) was the most popular incomedriven repayment plan for borrowers that has been available since 2010 proposed by the William D. Ford Act. The Income Based Repayment Plan will help borrowers (you) keep your monthly payment affordable with the payment being based on your discretionary income and family size. Most importantly, Income Based Repayment Plan will forgive any remaining balance as well as interest accrued after you have made payments for your term. Your term in this plan will generally be anywhere from 240300 payments (2025 years).
INCOME CONTINGENT REPAYMENT: The Income Contingent Repayment plan will take into consideration your income, tax filing status and the number of people in your household to determine your monthly payment just like the Income Based Repayment plan but the difference under incomecontingent repayment is that it is capped at 20% of your discretionary income. So, this plan is generally molded for persons that make a higher amount of income rather than others struggling financially that way your payment will be generally higher than other payment plans but your term will be shortened that way you pay off your debt sooner than later. This is also a Federal Forgiveness Program, meaning any remaining balance or accrued interest after making payments for your term will be forgiven by the Federal Government.
PAY AS YOU EARN REPAYMENT (PAYE ): The Pay As You Earn program was passed into law by President Obama on December 21, 2012. Borrowers may qualify if they receive a disbursement on a loan on or after October 1, 2011. As with IncomeBased Repayment (IBR), the borrower must prove partial financial hardship with their current specific situation. The Pay As You Earn Program caps your monthly Federal Student Loan payment at 10 % of your discretionary income. This is also considered a Federal Forgiveness Program; any remaining balance as well as accrued interest after making your monthly payments for your provided term will be forgiven by the Federal Government. Your term will typically range anywhere from 120240 payments (1020 years)
REVISED PAY AS YOU EARN REPAYMENT (REPAYE): The Revised Pay As You Earn Program is much like the PAYE program in the sense it is a Federal Forgiveness Program based on your financial situation (10% of your discretionary income and family size) but in the REPAYE program the increased accrued interest will be applied to your REPAYE regular monthly payment amount over the life of your loan until you receive loan forgiveness OR until you pay your loan amount in full. If you pay extra, your regular monthly payment amount will be adjusted until the total amount of the adjustment is paid off.
PUBLIC SERVICE LOAN FORGIVENESS (PSLF): The Public Service Loan Forgiveness Program (PSLF) forgives the remaining balance as well as accrued interest on your Direct Loans after you have made 120 qualifying monthly payments under a qualified repayment plan while working fulltime for a qualified nonprofit employer or for a public service position 501( c)(3). Your monthly payment in this program will also be determined by your discretionary income and family size much like the other Federal Forgiveness programs.
TEACHER LOAN FORGIVENESS PROGRAM: The Teacher Loan Forgiveness Program is intended to encourage educators to enter and continue in the teaching profession. Under this program, if you teach fulltime for five complete and consecutive academic years in certain elementary and secondary schools and educational service agencies that serve lowincome families, and meet other qualifications, you may be eligible for forgiveness of up to a combined total of $17,500 on your Direct Subsidized and Unsubsidized Loans and your Subsidized and Unsubsidized Federal Stafford Loans.
TOTAL AND PERMANENT DISABILITY DISCHARGE PROGRAM (TPD): Under this program, the Department of Education will relieve a borrower of the entirety of their Federal Direct Loan on the basis of your total and permanent disability. The borrower must provide information to the U.S. Department of Education to show that you are totally and permanently disabled. The Department of Education will evaluate the information and determine if you qualify for a total loan discharge.
FALSE CERTIFICATION OF STUDENT ELIGIBILITY OR UNAUTHORIZED PAYMENT DISCHARGE: A borrower may be eligible for the discharge of their Federal Direct Loan if the school a borrower has attended falsely certified their eligibility to receive the loan based on their ability to benefit from their training or if the certification received is not valid upon any guarantees or promises the school endured.
At no cost or obligation, you may contact us to find out which program will benefit your current specific financial situation. It’s time to start saving and getting ahead. Don’t let your student loan burden suffocate you from living your life. There is an answer and we will provide you a solution.