Better job, fat salary, means it should be preceded by higher education. College education today has become very exorbitant to the extent pursuing it on one’s family income has become very remote and impossible. As caught in between the mountain and the valley, the aspiring students are in a dilemma, the only course available for him being to look for educational loan with student debt relief programs on soft terms.
Understanding the predicaments of students, the authorities are gradually coming up with many such packages making such loans affordable a stress-free way. A few approved options are brought to the notice of readers here so they are able to avail of such provisions and concessions easily.
As per a Federal Reserve Bank of New York finding, the outstanding student loans in America amount to $1.1 trillion as on date, a staggering 14% of the total relief package released for resurrection of the country’s economy. Though seemingly a drag on the economy, its benefits are far-reaching, proving a wise investment.
1.Income-based Loan Repayment Plan:
A recent brain-child of President Obama, this is friendly for low-income section of students. Key aspects are: Monthly instalments will be only up to 10% of their basic income; stretched over 25 years, the amount will also change conforming to the family size and income.
But it has some disadvantages in that it excludes loans processed by students’ parents, consolidated loans and loans given by financial firms, with requirement to prove the poor pecuniary condition to qualify for the concessions. Also, due to the long period (20 years) involved, it results in more interest being paid. But one consolation is that outstanding amount if any beyond this 20-year period, will be waived if you are working in a public or non-profit concern. However, consult the Federal Student Aid Website also for latest details.
2. Federal Loan Forgiveness Program:
Serving voluntarily in a public or non-profit organization, teaching in low-income regions, or other types of public service (Teach for America, AmeriCorps, Peace corps, teaching at public schools, etc.) can forgive you from the student debts. Relief includes waiver up to 70%, total waiver after 10 year service, and government paying interest for you in some cases.
3. Employee Packages:
Known as LRAP-Loan repayment assistance program, this makes your company pay you additional amount to help you clear the debts. Incidentally, this helps talented people to get wooed also to these sectors.
4. Pay As You Earn:
This benefits those who suffer from partial monetary tough-times, by allowing them to pay the lowest possible instalments based on the 10% of your discretionary income by extending the period to 20years, and possibly forgiving the pending loan after the 20-year period. But not all loans qualify for this facility.
5. Bankruptcy Code For Student Loans:
This is yet another option which students under extreme indigent conditions, can think of for getting full or partial forgiveness. Despite availability of many student debt relief programs, good number of them lack awareness, suffering from the repayment burden.
The present government has released a plan “student outreach program” to spread more awareness amongst students about them. Students would take a cue from this, it is hoped.