Pay Off Your Student Loan with Help from Uncle Sam
Today could be a day of liberation for millions of college graduates who are struggling with college loan payments. Thanks to the federal government's new Income Based Repayment Plan, which takes effect today, many debtors can cut their payments on their federal student loans to less than 15 percent of their incomes.
The U.S. Department of Education's official site about IBR is a great place to start, but anyone thinking of applying for the program should consider a few details:
Are you married or engaged? Marriage just got more expensive, because the government initially plans to base the new payments on "family income," no matter how much one spouse owes. But Edie Irons, spokeswoman for the Project on Student Debt, says a move is afoot to reduce the marriage penalty sometime next year. In the meantime, she suggests debtors who already are hitched (or plan to wed) see if filing their taxes separately would give them enough debt relief to offset the extra hassle and possible tax expense.
Is there any possibility you will work in any type of public-service job (for any government agency, school, nonprofit, etc.)? If so, consolidate your federal loans directly with the federal government first. Those are the only loans that qualify for public-service forgiveness.
Have you been laid off or had a pay cut? Keep good records. The government plans to base the new loan payments on the income debtors report on their previous year's tax filings. Those who want their payments to be based on current, lower incomes will have to provide documentation. Those who get a new job or a raise should plan on higher payments the following year, as debtors have to reapply for IBR, and document their recent income, every year.
Have you been working in a public-service job and been making your payments for the last year or two? Good news: You might qualify for retroactive credit towards loan forgiveness. Anyone who has worked in a public-service job and been making regular, on-time payments since Oct. 1, 2007, can have those payments counted toward the 120 (or 10 years' worth of) on-time payments that are required for the remainder of the loan to be forgiven under the government's public-service cancellation offer.
Confused by similar-sounding jargon? Watch out. There are several sound-alike programs, including "Income Contingent Repayment" and "Income Sensitive Repayment." Remember: the federal government's Income BASED Repayment is generally considered to be the best deal.
Hoping for more relief? Alas, the new IBR applies only to federal student loans. So, parents who borrowed to pay for their kids' tuition won't get any help from the new program. And students who took private, signature, or alternative loans from companies like Sallie Mae won't be helped by the new program. The federal government and private lenders generally do offer other payment plans to help strapped borrowers, however. So, if you're having trouble making your payments, it pays to call them and ask for help.
See more on Paying for College.
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help pay off student loan
im a single parent with three kids and i have a student loan thats in default. my kids are three,four,and five. im currently working making minium wage. i can barely make ends meet.i attended school in 2004 they also told me that i would find a job making good money and their is no jobs out here.if their are they are only paying minium wage. im tired and feed up because im living from check to check. I cant afford to pay my bills. i cant go back to school because of my student loan is n the default. i need help. i just dont want my kids to suffer cause we are struggling, we just want a better life and im interesting in advancing my career so that me n my children can have nice life.please help us if its just helping me getting back in school.my interest rate is over three thousand dollars which is more than what i old on my student loan.and we dont want to settle for less and we want something better n life.the child support system is messed up single parents have no justice.
Help paying loans
Right now, there is no help for me in repaying my loan. I have been unemployed since Feb '09 and due to an error in my paycheck at that time..I ended up owing the IRS last year, which I pay monthly (it's not their fault)..since my paycheck was direct deposited, I did not notice the taxes that were to be taken out. Call it stupid on my side. My husband and I had to file separatly because of what I owed. Now, I have been receiving unemployment ($222 per week) and my husbands hours have been cut. We still have a roof over our heads and are luckier than most or alot of people caught up in this cycle of crap. The govt gives loans to companies that misuse it (ex.AIG)..but I can't get any help..food stamps..what a joke..my husband makes $7 to much a year for us to qualify (it's true). My loans are through FASA and they are only letting me take 6 mth deferments (since I'm unemployed) and I can't take the full deferment because I don't work at least 30 hours per week (this is due to a new govt plan). I have a 2 year degree - I techinally have a 4 year degree, but due to the rising cost of paying for that degree, I have yet to obtain it. Right now it will cost me at least $500 in fees just to get the degree so I can get a better job..how funny is that? Getting a job? Heck, I couldn't even get a job at Wendy's (very true) from being overqualified..now the banks are screwing us..taking out debits prior to checks being deposited (this is happening to everyone I know..true) just so they can get their dog gone fees. Can't get ahead, tired of being screwed, can't stop it..this is why I need help, just like the rest of you. How can we try to get ahead? If you have the answer, let me know. I have been trying to find out myself. Although we try to ask for help, the govt isnt going to help. They just put us in a corner and say the hell with them.
i nee help paying off my loan
I am father who has three daughter and aa wife. My wife got laid off and I'm only working part time and i can't afford to pay my student loan.I went to school because tey told me when i graduate they will find me a job in that field. I live in muskegon, Michigan and there is'nt any jobs. So could please help me before me and my family gets kick out of our house. Thank you!
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