Important Things Every Student Must Know About Student Loans and Obama Loan Forgiveness
For students who are in the verge of graduating, May is a very important month. Aside from considering thinking about your final exams and looking forward to your dream job, it is also important to think about your student loans. You’ll need to cover the costs of your student loans after you graduate as payments will begin 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. The good new is that repayments can be simplified with a small dose of organization, and all you need to do is to get the necessary information so you can write it down or just create a direct debit account so the payment will just be automatically 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 this program, a borrower receives a lot of benefits, such as consolidation of multiple federal loans into one new loan, and the borrower is given repayment plan options that are more affordable and flexible. The different types of repayment plans include standard repayment, graduated repayment, income contingent, income based, and pay as you earn. Standard repayment refers to the processing of a payment with fixed amount in the entire duration of the loan as determined by the interest rate, amount of the loan and its terms. Graduated repayment allows a borrower to pay lower than standard repayment plan, but the amount increases gradually 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. The plan that has the lowest monthly payment is the Pay as You Earn or PAYE basing also 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 ranges from six to nine months and it depends on the type of your 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.