Things Every Student Should Know About Student Loans and Obama Loan Forgiveness
For students who are graduating, May is a very important month. Apart from your final exams, and the dream job you’ve been wanting all throughout your life, it is also important to think about your student loans. You need sufficient cash in order to cover the costs of repaying your student loans after graduation as they start to kick in. It will be much easier if you only have one student loan, but if you have multiple student loans, then that will be harder. It is really confusing thinking that you need to deal with different agencies, and sometimes you won’t even know the amount you owe and when you should need to pay. Now, repayments can be simplified with a small dose of organization, and all you have to do is to obtain the necessary information so you can write it down or just create a direct debit account so the payment will just be taken out.
One way to help new graduates in reducing their loans is by taking advantage of Obama Student Loan Forgiveness or Federal Direct Loan Program. Obama Student Loan Forgiveness applies to federal student loans but not to private loans. With Obama Student Loan Forgiveness, the borrower reaps a lot of benefits such as being able to consolidate multiple federal loans into one new loan, and the borrower is given repayment plan options that are flexible and affordable. Obama Student Loan Forgiveness Program offers repayment options including standard repayment, graduated repayment, income contingent, income based, and pay as you earn. For standard repayment, a fixed amount is paid by the borrower for the entire life of the loan, basing on the interest rate, term of the loan and borrowed amount. For a graduated repayment, the borrower can make lower payments as compared to standard repayment plan but the amount gradually increases every two years. The borrower makes payment basing on his income in an income contingent plan, as well as basing from the interest rate, loan balance, and family size. A borrower can make payment basing n the income and family size or fifteen percent of their discretionary income for income-based repayments. PAYE or Pay as You Earn repayment has the lowest monthly payment basing on the borrower’s income or ten percent of the discretionary income.
It is important finding out the grace period of your student loans. It is usually six up to nine months depending on the type of loan. It gives you more time to find money to pay your loan. Indeed, you don’t have to stick to standard or traditional repayment methods because there are a lot of options out there, feel free to check our website for more information.
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