Eliminate Student Loan Debt With These Programs
June 28, 2016 governmentgrants.info Staff
It's very common for today's youth of America to be afraid of struggling to make payments on their U.S. student loan debt. Even though it might seem hopeless, there is good news! There's a way to reduce the crippling burden of student loan debt after graduation. Graduates should consider seeking employment in public service.
Recently, extremely important student loan relief programs have been created to benefit college graduates who opt for employment in the public service sector. Public service is notoriously a low paying employment area, though the jobs are essential to our society. In some cases, students can overlap benefits from multiple loan relief assistance programs.
Shockingly, a high number of public service workers aren't aware of this substantial financial aid option. Between 2007 and 2015, just a few hundred thousand borrowers of the millions of potentially eligible borrowers have actively been trying to meet the requirements for public service loan forgiveness.
If you think this program is perfect and you are probably eligible, you should begin planning how you're going to get the most benefit out of the debt reduction program right away. This program can help many students get ready for a rewarding career in public service while paying off their burdensome student loans. Here's what you should do:
Pick The Right Student Loans
All loans are created equal. To take advantage of this federal Public Service Loan Forgiveness, PSLF, program, your loan has to be a federal direct loan provided by the Education Department. Loans taken out after after 2010 are going to be a direct loan. Other federal loans can qualify, though they first must be switched over to a Federal Direct Consolidation Loan. Private lender loans don't qualify for this program.
Find a Career In Public Service
Certain full-time jobs in government or nonprofit agencies may qualify you for assistance under the federal PSLF program. If it seems like the right move for you, choose to pursue your education in eligible careers. Eligible sectors are healthcare, education, social assistance, and the arts. Be sure to check if the job you're interested in qualifies as public service under the definition for the program.
Choose A Repayment Plan That Makes Sense
In order to for debt forgiveness, you must make at least 120 regular payments. Be sure you calculate all options to find which monthly payment plan offered by your loan carrier works best. If your default loan repayment schedule covers 10 years, or 120 payments, then you'll have struggled for 10 years and your student loan debt will be completely repaid before the end the minimum 120 payments required for forgiveness. If you chose this option, you'll have repaid your entire debt all on your own.
Explore other repayment plans that are based on how much money you make. The federal Revised Pay As You Earn, REPAYE, plan offers payments that calculated so you pay approximately 10 percent of your income as monthly payments, minus certain expenses like rent. Because payments are generally less than those required by the standard plan, this repayment schedule can span as much 30 years.
Search For a School Offering LRAPs
Many organizations have funds set aside to aid public service employees in making their burdensome monthly loan payments. Loan repayment assistance programs, or LRAPs, are being offered by an increasing number of American colleges and universities. LRAPs originally were directed at law students in an attempt to urge law graduates to take careers in legal public service . These public service legal careers are typically low paying positions which makes it difficult to pay the extensive education debt held by most law school graduates.
Additionally, there are about 70 small, private and religious colleges that offer LRAPs through partnerships with the LRAP Association. These LRAPs have different rules than the federal PSLF program, though it's a huge a advantage for those planning a public service career or to work in a religious organization, both of which generally pay less than other employment areas.
A typical LRAP will pay up to 100 percent of each required monthly loan payment as long as the graduate's yearly income is under $20,000. The program partially makes payments for graduates with incomes up to $40,000. Those with income over $40,000 are disqualified for repayment assistance under these programs.
Seek an Employer Offering LRAPs
Many employers are starting to see the benefit and are beginning to offer LRAPs as part of an employees benefit package. Even if your employer is making your loan payments, the payments still count toward your required 120 minimum monthly payments. Not to mention these employer payments help to minimize the burden of making monthly payments.
More employers in the private sector are also starting to see the value in offering repayment assistance as a benefit. One reason for private employers to help this way is to assist employees save for their retirement. Generally, employees can't save for retirement while they have a large burden of paying student debts. Employees are only eligible for these private repayment assistance programs while they are actively employed with the employer that's offering the program.
How can you determine which program is best for loan assistance? Do the proper research and really think about what you want in life. Choose an option with low payments that fit into your budget, a realistic repayment schedule, and employment requirements that play into your life goals. Generally, the best programs help you pay more student loan debt spread out over a longer period and have the fewer overall limitations.