Student Loan Forgiveness: What You Need to Know
Why your spouse's income could trip you up
Are there any catches to the government's new income-based student loan repayment plan? Sure. Edie Irons, communications director for the nonprofit Project on Student Debt, says fine print in the new law could trip up some debt-burdened grads.
For example, you'll have to be careful to make sure you're applying for the new plan and not the older and less attractive but similar-sounding plans offered by the government and some lenders. The key phrase is "income-based repayment." Forget about "income contingent repayment" and "income-sensitive repayment," Irons says.
Also, if your income is so high that your federal debt payments make up less than 15 percent of your disposable income—even if you have other big bills, such as medical debts or private educational loans—you probably won't qualify for the program.
Plus, because the law currently calls for the government to consider a family's entire income, those with working spouses may have to make higher payments, even if their spouses also have big educational debts.
And anyone hoping for forgiveness on public service loans had better keep excellent records, since under the current law, when the 10 years are up, the burden will be on the student to prove that he or she made all the payments on time and never exceeded the income limits. Irons and her group want Congress to eliminate some of these sticking points. But even as it is, she says, the new plan "will be an enormous help to many thousands of borrowers."
Reader Comments
need help getting in school
was going to school for early child care,working on my thrid semester and was put on probation really need help on getting back in college i have four kids and without an education theres no telling where we will be in the future
Are you kidding??
kathy, are you being real??? are you in some way far off lala land?? if they just want 9k on 24 yrs old loan that was around 2.5k i hope that you tell them thank you and pay it back asp. That mean that they have only charged you around 270 per year! Your really out of realistic picture...Please ask them on how to do it for me`:))
graduate school loan repayment
Help Iam 48000 indebt and cant get a job in my field, My disability continues to worsen making it difficult to work full time can you give me some ideas?
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