Sunday, October 30, 2011

New Student Income Repayment Program, and Other Forgiveness/Cancellation/Discharge Options

Barak Obama got a fair amount of p.r. mileage out of expanding the student loan income repayment option.  In this proposed plan (the details which need to be hammered out), repayments will be limited to 10% of the student's income, with a forgiveness of loans after 20 years of payments.  However, a plan of this sort has already been in place for a couple of years.  In the current scheme, students can have their payments reduced to 15% of their income, with forgiveness after 25 years of payments.

There are other plans for federal student loan reduction, forgiveness or cancellation, too.  If you are a teacher, explore this page to find forgiveness (for teaching in low income areas, under certain circumstances) and other options.  Nurses also have options for partial loan forgiveness for public service.  And there is another program for public service for other professions, too--assuming you have already made 120 payments towards your loans.  You may be eligible for total cancellation of a federal student loan if you are permanently disabled.  You may also be eligible for loan cancellation if the school closed down before you could graduate, or within 90 days after you quit studying there.

To check out all your cancellation options, see this page.  For more options for delay,  forebearance, or "income sensitive" options (like the new one announced last week) check out this page.

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