Save & Share |
|
|
|
|
| Share on Facebook | |
Struggling To Pay Student Loans?
New payment option should alleviate student debt
Written by Jeeyoon Kim
There was a time when college was affordable and students were almost guaranteed a well-paying job right after graduation. If only this was true for college graduates today.
Students, who continue on to post-secondary education, not only have to suffer with paying off outrageous tuitions, but many are haunted by the numbers that trail them after graduation. With most school’s averaging 30-40 grand a year, in today’s economy, graduates just don’t stand a chance to pay back loans without going bankrupt.
The Department of Education recognizes this as a problem and has developed a new system called the Income-Based Repayment Program. The Department works with the students and for the students to come up with a system that will alleviate economic struggles in any way they can. They are on the students’ side.
That is why anyone can use IBR to pay off their loans, even switch to IBR if they are already signed up for another program, as long as the loans are made to the students, not parents or private parties.
Students, who continue on to post-secondary education, not only have to suffer with paying off outrageous tuitions, but many are haunted by the numbers that trail them after graduation.
The program has been tailored specifically for those who are not wealthy and have built up a hefty amount of debt in loans. In other words, the program lends the average Joe a hand. To sign up for IBR, the student must not be able to afford a standard 10-year plan. Under IBR, it is assured that payments will not exceed 15% of an individual’s income. Also, if the income is below 150% of poverty level, the required payment will be $0.
All of these innovations were designed to help students nation-wide since in previous cases there was never a cap to required loan payments. Contrarily, IBR has implemented a very strict cap at 15% (most cases do not exceed 10%) to make sure that no student finds themselves in a sticky situation. They will even cater to your needs should your financial situation fluctuate, in which case a “sliding scale” is used to re-evaluate your payment requirement annually.
What truly makes IBR unique is the allowed time frame. Most programs demand that loans must be paid in full by the end of a ten year period. IBR on the other hand does not believe in those guidelines. Fact: if loan payments carry on for 25 years the outstanding balance will be cancelled altogether (Yes, really).
So how can you find out if you can sign up and qualify for IBR? It’s very simple, just contact your loan lender and ask about the program. If you do not know who your lender is or how to contact them, you can search online at the National Student Loan Data System at www.nslds.ed.gov. Your lender will evaluate your finances using the IBR calculator and you will be well on your way.
What do you think? Twitter Us
For more information, visit www.ibrinfo.org