There would be two primary changes that allow graduates to dramatically save on their loan payments and reduce their bills. To get more information about this, Bill Pen, a lawyer by profession, gives good advice to students, the would-be workers of the country, at the Lewis and Clark Law School in Portland Oregon. Starting from this coming July, students can experience changes in Perkins, Grad Plus and Stafford student loans.
First off, student loans would feature an income-based repayment. This would allow a lender to cap payments at only 15% of the creditor’s total income. In the past, the student loan system was standardized to 10-year repayment plan. Students can lengthen the payment term if they consolidate their debts. Consolidating student loans give them more time to repay their debt into a 15-year, 20-year or 30-year repayment program.
Such a new repayment plan for student loan would be based on his or her income. This would be a great help for people who would be getting a relatively low paying jobs. With this new policy, they can still pay their loan accordingly even if their income is below average. This is especially true for teaching jobs and employment under the government or non-profit organizations.
Furthermore, any remaining balances owe after 25 years will be forgiven. This is one of the major changes that will benefit many. In the past, it was almost impossible for graduates to escape from student loan debts because under the US bankruptcy laws, student loans are not dischargeable.
To be able to join the 15% program, it is important that you ask your lender about its income-based repayment program. This can give you the lowest payment option to pay off your student loan even with a low paying job.
Another change in the student loan payment policy is for people who have public service jobs on non-profit organizations and government employees. The program is aptly referred to as the Public Service Loan Forgiveness and Federal Direct Loans Qualify. To be able to get this type of student loan policy, you may have to consolidate your loan.
So how does this new policy go? If you are working full time doing public service jobs for the government or non-profit groups while still on your student loan payment program, your remaining balance is forgiven after 10 years or after 120 loan payments. The public service jobs that can take advantage of this policy include jobs in the law enforcement, military service, nurses, social workers, librarians, teachers and etc.
