Coronavirus hit the world badly and one of the most affected is the education sector. Students are in debt due to financial crises and trying to delay their loan payments. Companies are charging high interest rates and making profits. Also, students are borrowing more money from private and federal organizations because education is becoming expensive. They are having a hard time paying back their debt. Now, students are stuck in this situation, and it is getting worse day by day. Here is a guide student can get loan repayment plans.
Governments around the world are taking initiatives to give relief to various loan programs. The American government has also announced a student loan payment extension on 6 August 2021.
Here we will tell you some tricks and tips to reschedule your loan payments. Students after graduation have many difficulties paying their bills. However, the U.S government makes it easy for students to pay their remaining debts.
Students loan repayment after suspension ends
The U.S Education department has recently suspended all loan payments until 31 January 2022. But one must be ready to start repaying all the debts. Every student should keep an eye on their loans and make their payments possible before the due date.
Moreover, students should stay in contact with their student loan repayment advisor to get contemporary information. Also, follow these steps to view your due payments
- Open your profile on the Federal Student Aid website. Put your current and accurate information.
- Explore all the available options and select the best plan according to your affordability.
Best student loan repayment plan
You may choose an Income-Driven Repayment (IDR) plan to pay your loans. Students can choose any of these plans to pay their loans making monthly payments. The amount of monthly payments depends on gross individual income, the amount of loan student have, and family size. You have to pay approximately 10 to 15% of your annual income. We will tell you some of the plans here
- Income-based repayment plan
- Pay As You Earn repayment plan
- Income-Contingent repayment plan
- Revised pay as you earn repayment plan
Students who really need the benefit of loan repayment plans are not aware that they exist. They have a hard time enrolling in these programs.
These plans will help you to lessen your financial burden. Moreover, you can return your debts to your lender in time with no extra charges.
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Student loan payment cancelation or discharge programs
Indeed, it is the responsibility of every student to pay all his debts after completing their degree. Although, in some cases, it is nearly impossible to pay loans. There are various reasons for this like unemployment, disability discharge, bankruptcy, or any sudden accident.
If someone is not able to pay their loans, he/she can apply for loan forgiveness programs. However, sometimes it is difficult to get approve your loan forgiveness application. The reason is that some loan discharge requests are fraud.
Currently, there are two options of student loan payment forgiveness that are being discussed in the United States. House and senate democrats want President Biden to forgive 50 thousand dollars of student loans through executive order. Whereas Biden agrees to only 10 thousand dollars with certain conditions.
Some types of loan forgiveness programs are offered by the Government which can be accepted.
Forgiveness because of death
Student loan payments will be discharged if the death of the guardian happens who took the loan. The family will not have to pay the debt after the demise of the borrower. However, you have to submit the authentic death certificate to your loan service provider along with the application form.
Discharge due to bankruptcy
One of the cases for loan discharge is the declaration of bankruptcy. You will have to file a case in bankruptcy court and prove that loan repayment will disturb your economic condition. Moreover, students have to prove that loan payment will be a burden for his/her family as well. However, the court will decide considering the following factors
- Repayment will affect the basic living standards of the family
- Crisis conditions will sustain for a considerable time period
- The student has made efforts in past to pay the debts.
If the bankruptcy court agrees, all the student loan payments will be discharged and you do not have to pay a single penny.
Loan discharge for teachers
Teaching after completing your education for five years can exempt you from loan payment. You will be free from paying your student loan up to $17,500 if you teach in an elementary or secondary school. There are some eligibility criteria to serve as a teacher
- You must have a bachelor’s degree at least
- A certificate of a teacher being issued by the State
- Temporary certifications are not acceptable
After fulfilling all the requirements to get a job as a teacher, you can make payments for your student loan easily.
You can also take Public Service Loan Forgiveness Program along with the Teacher Loan Discharge program.