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Federal Student Loan Repayment Options

September 10, 2011

Federal Student Loan Repayment

There are 5 different methods of federal student loan repayment that you can choose from when looking for a repayment plan that best suits your financial needs as well as how fast or slow you wish to pay off your loans. These plans can also be swtiched any time during your repayment process so you do not have to worry about being stuck with a federal student loan repayment plan that doesn’t fit your particular situation. Below are each repayment plan as well as all encompassing information on each.

Federal Student Loan Repayment

Federal Student Loan Repayment Options

First off this section will discuss the basic programs that are offered for each federal student loan, the next section will discuss specifcs about repayments offered through federal grant programs. Here are the federal student loan repayment options that you can utilize come payment time:

  • Standard – The standard federals student loan repayment option is one that will allow its borrower a timeframe of 10 years to pay back student debt. The payments are a bit higher then longer repayment plans, but will get you out of debt faster as well as you will save money because you will be paying less interest because of the shorter time frame of payment.
  • Extended – The exteneded federal student loan repayment method is one that allows you anywhere from 12 to 25 years to repay your loan. This method is available for borrowers who have over 30,000 dollars in debt. Payments are a lot lower than standard repayment, so this is for those who cannot currently afford a higher monthly payment.
  • Graduated – This method allows the borrower to start with a lower payment and have it increase every two years, which will give you the freedom of low payments right after college and higher payments down the road when you can afford them. This option can also be combined with the extended federal student loan repayment option.
  • Income Contigent – Income contigent repayment bases your monthly payments off of a percentage of your montly income, usually being 15 percent. So whatever you earn, no matter how much or how little, your payments will be at 15 percent of your income.

Federal Student Loan Repayment Specifics

Certain aspects apply to different federal student loan programs, here is an overview to these federal student loan repayment specifics.

  • FEEL Loans can also qualify for income contigent repayment where your montly payments must equal at least what you pay in interest each month.
  • Dircet loans provide income contigent repayment where your montly payments cannot go higher than 20 percent of the discretionary income that you earn. This option also allows one to pay as low as no payments at all if their income is very low, at which if they don’t pay off any part of the loan after the 25 year repaymen period, whatever amount is left on their debt will be considered income and they will be taxed on it.

 

 

 

If you are having trouble making your payments and are looking for relief, click this link: federal student loan repayment, where you find information on different student loan relief methods.

Student Loan Relief Methods

September 10, 2011

Student Loan Relief

Student Loan Relief Methods

First off, this aricle is on student loan relieft methods, if you are looking for methods to pay off your loan faster click here: student loan relief.

It doesn’t matter who you are, if you have student loans or student loan debt, it’s unfortubately a burden in which it seems like there is no light at the end of the tunnel. But before you abandon all hope, we have a few options, what are called student loan relief methods, that like it sounds, can provide you with some much needed relief when it comes to student loans. There are multiple methods of student loan relief that you can apply towards you debt that can help in many ways, and can be used simultaneously. Below are the options that you can use.

5 Methods Of Student Loan Relief

Here are the options you can use that can provide you with student loan relief:

Student Loan Forgiveness

  •  Student loan forgiveness is an excellent resource that allows you to either have a portion of your loan debt wiped away, or in some cases the entire thing forgiven. Student loan relief through forgiveness can be done thorugh many methods, some of which include volunteer work thorugh organizations like Americorps, Peace Corps and VISTA and they either pay a percentage off of your loan each year that you work for them anywhere from 15 to 30 percent per year, or provide you with a lump sum each year of service that you can use towards your debt. The other option is public service jobs which can result in percentages paid per year as well as forgiving your entire loan. This is where you work jobs in area of low income for specified amount of time, where your service is greatly needed. The best way to find out what student loan forgiveness can do for you would be to contact your loan lender.

Student Loan Consolidation

  •  This option can provide you with lower payments each month as well as grouping all of your loans together so that you only have to pay one loan payment each month. This student loan relief method can bring you lower payments as the consolidation company extends the repayment peroid so your payments are smaller over a longer period of time. If you are worried that this will take you too long, no need to worry, because as soon as you get out of the financial pinch and can pay more there is usually no penalty to do so. You can also enjoy the benefits of student loan relief through consolidation with just one loan, you don’t have to have multiple. Also, interest rates are generally lower with consolidation, but shop around first and make sure you get a lower interest rate compared to what you loans are currenlty at. Note private loans and federal loans can not be consolidated together.

Income Contigent Repayment

  • Income contigent repayment is another gerat option to consider when looking for student loan relief. This is an option of repayment on all payment plans that has your montly payments set at what is usually 15 percent of your income, and payments have been as low as 5 dollars in certain cases.

Loan Deferment

  • This option of student loan relief can be used for a variety of different reasons other than being in school which is the general reason of deferment. If you aren’t familiar with the term, it essentially means postponing payments on your student loan or loans for a short period of time. Some of the ways this can be done is through; economic hardship, disablity, public service jobs as well as matters related to your family, like pregnancy, attending to a loved one for a certain amount of time that requires that you stop working, caring for new borns as well as newly adopted children and more.

Student Loan Relief Conclusion

Like it was said above, the best thing to do now if you are interested in utilzing any of these student loan relief methods is to contact your lender and inquire about is with them as they will have the most up to date information on what can apply to your situation. By using these student loan relief methods, you can avoid the act of bankruptcy, which first off is very hard to qualify for and it stays on your record forever.

 

 

Student Loan Tax Deduction

September 10, 2011

Student Loan Tax Deduction

Student Loan Tax Deduction

Did you know that your interest on your student loans may be tax deductable? The Tax Relief Act rules are that you can deduct up to the amount of 2,500 dollars in the interest on you paid on your loan each year you are paying on it, done on your income tax return. This can be done by students paying interest on their loans, parents paying for their childrens loans and spouse payments, anyone who is is paying interest fees on their debt are eligible for student loan tax deduction (under certain qualifications, discussed below).

It is important to know that between the periods of 2010 and 2012, can can deduct up to 2,500 dollars whichever year of repayment you are in, but after 2012, you can only take part student loan tax deduction between the first 5 years or your repayment term.

Student Loan Tax Deduction Qualifications

  • You must be making under the amount of 55,000 to 70,000 dollars individually, or under 110,000 and 140,000 between you and your spouse. If you make these figures or above, you will be unable to qualify for a student loan tax deduction.
  • The student must have been enrolled in a schedule the was at least half time at your college, vocational school, training facility, etc.

Student Loan Tax Deduction Terms

  • You can use student loan tax deductions for many different parts of your schooling, some of which include, tuition, books, room and board, tranportation to and from your school as well as other general living expenses thorughout the year. This information must be proved to the IRS that you spent this money on the above expenditures.
  • If you and your spouse both have student loans you are paying on, you will need to file a joint tax return, which both can deduct up to 2,500 dollars each.

If you are interestest in utilizing student loan tax deduction you can either contact a personal tax preparer if you or you family has one, or you can contact one that is in your immediate area who will assist you in filling out the necessary information that is needed to be able to recieve tax deductions on your student loans.

Other Valuable Information

Also note that when filling out your tax return for you student loan tax deduction avoid using a 1040EZ form as this form doesn’t allow you to file for interest returns, you will want to either use a 1040 or a 1040A which both allow you to deduct on interest payments.

Like it was said above, you can do this each year after 2012 for the first 5 years of your repayment term. This can be a great way to get a lot of money back each year that can be utilized as a large payment on your loans. You should also take advantage of this 5 year timeframe if you are paying under 2,500 dollars a year on interest, and up the payments so that you do hit the 2,500 mark so that you can get more money back each year in student loan tax deduction funds.

 

 

Student Loan Discharge Major Overview

September 10, 2011

Student Loan Discharge

student loan discharge

Student loan discharge is when your student loan debt is completely wiped away or heavily reduced. This can be done in certain situations if the strict set of guidelines. There are multiple reasons that a student loan can be discharged, which will be discussed below along with other valuable information that you should know and keep in mind if you are going to try to your student loan discharge on your debt.

Student Loan Discharge – Qualifying Reasons

There are 5 reasons that will dicharge your obligation to pay your student loans. Here are the reasons.

  1. If the college you are attending to is closed down before the completion of your training or degree.
  2. Specific public service jobs also can qualify for student loan discharge.
  3. What is called false certification discharge can discharge student loans. This is where someone commited fraud in your name, taking out a loan under your name which leaves you with the debt. Upon proof of this, you can get the loan debt wiped away. The lender of your loans must believe that information actually proves that fraud was commited on you, and not a scam to try to get out of loans.
  4. Filing bankruptcy is another way of student loan discharge but certain laws have made it a lot harder to file for bankruptcy on your student loans. The only way this is done is through a court trial in which they state that paying student loans would be the cause of what they call a “undue hardship”. This is where a person with loan payments would drop below the minimal standards of living if they in fact have to continue the payments on the loan.
  5. Passing away or permanent disablity.

Applying For Student Loan Discharge

Apply for student loan discharge is to be done through different methods, depending on your loan holder and loan you have. The best thing to do if you intend on applying for student loan discharge would be to contact the holder of your loan and they will give you more information on the process as well other encompassing information involving the process.

Other Student Loan Discharge Information

  1. If you apply for student loan discharge and are waiting on a pending decision, you need to continue paying monthly payments on your loan debt until it is decided whether or not your are eligible for your student debt discharge.
  2. Your student loan holder makes the final decision whether or not your qualify for student loan discharge, and and appeal cannot be made to the Department of Education unless you were a victim of fraud.
  3. You cannot apply for discharge if you are unhappy with your schooling experience. This includes believing that  your schooling not having teachers that are qualified or unqualified equiptment, did not provide you with placement in the workforce that they originally promised or they were found guilty with charges of fraud.
  4. You cannot get your student loans discharged if you were an atendee of a non eligible study program that you took at your school.
  5. Financial difficulty doesn’t necessarily qualify for student loan discharge unless the difficulty is worthy enough on the bankruptcy on your student loan debt.

 

 

 

Military Student Loan Repayment

September 8, 2011

Military Student Loan Repayment

Military Student Loan Repayment

First off, before we get into Military student loan repayment, chances are good that you have either served or are intending to serve, so we want to just extend a big thank you for providing your service to our country! The Military student loan repayment program was started as an incentive for people to enlist and serve. The rules of eligiblity are that you can get a portion of your debt paid off for non prior enlistments of the Military on your eligible loans for college. It is important to know that Officers do not qualify. Below will be information on the maximum debt totals that can be wiped away as well as qualifying loans and eligiblity requirements.

Military Student Loan Repayment – Maximum Forgiveness Amounts

Currently the Congress has stated for Military student loan repayment that the maximum amount that can be forgiven on student loan debt for non prior service members is up to 65,000 dollars. Although this is a general rule, each branch of service has it’s own maximum forgiveness totals. Here are the totals of military student loan repayment for each branch:

  • Active Duty can get one up to 33 1/3 pecent paid off of their loan each year that they provide their service or 1,500 dollars whichever is the greater total. This payment process is started after the first year of service.
  • Army and Navy pay up to the maximum for non prior service enlistment for active duty.
  • Reserve enlistments in the Army can get up to 20,000 dollars of their debt wiped away, which includes the national gaurd as well.
  • Air Force service will get enlistment members up to 10,000 dollars of their loan debt.
  • Navy Reserves offers up to 10,000 dollars in military student loan repayment to those enlisted as Reserves.
  • CLRP through the Air Force Guared can garner up to 20,000 dollars off student loans by working specified jobs that are experiences shortages.
  • Army and Navy Reserves can receive up to either 15 percent off their loans or 1500 dollars whichever amount is deemed greater
  • The Air National Guard can get eligible memebers up to 15 percent or up to 5000 dollars of their loan, depending on which amount it greater.

Loans That Qaulify For Military Student Loan Repayment

Not all loans qualify for the Miltary student loan repayment program. Here are both the qualifying loan programs that you can use for Military student loan repayment.

  • Stafford Loans
  • Parent PLUS Loans
  • Consolidated Loan Program
  • Federally Insured Student Loans
  • Supplemental Loans For Students
  • Perkins Loans
  • Auxillary Loan Assistance For Students

Military Student Loan Repayment Qualifications

Here are the qualifications one needs to meet in order to participate in Military student loan repayment:

  • Active members should not have any past military experience.
  • 6 year enlistment is required if you are going to serve in the following: Army and Navy Reserve as well as the Army & Air National Guard.
  • You must enlist with a high school education in the Army as well as received a score of 50 or above when taking the Armed Forces Vocational Aptitute Battery testing.
  • On your contract of enlistment, the CLRP needs to be annotated.
  • For branches where shortage jobs are worked to receive loan forgiveness, you need to be working in one of the specified jobs that are included in the qualifying list of jobs. A local recruiter can explain to you which jobs qualify.

Other Details of Military Student Loan Repayment

  • The amount paid off on your loans is considered to be taxible income, that needs to be paid to the IRS.
  • Any interest that has piled up is currently not eligible for loan forgiveness.
  • Often times participants in military student loan repayment programs can get their student loans defered, which you should contact your lender to see if this is a possiblity

 

 

Student Loan Payback Methods & Strategies

September 8, 2011

Student Loan Payback

student loan payback

This article deals with both the different student loan payback methods as well as methods that can help you payback your student loans FAST. First off repayment methods:

There are usually 4 student loan payback methods that one has available to them when they are just starting to pay off their loans. These 4 options are:

  •  The standard option in which your payment is the same each month and usually lasts for 10 years.
  • Extended student loan payback is the second where you can get your repayment period extended from the normal 10 year to anywhere from 12 to 25 years, which comes with lower payments, but more interest in the long run.
  • Graduated repayment is the third option where payments start low and increase usually every two years,
  • Income Contigent is the next student loan payback method and your monthly payment is based of usually 15 percent of your monthly income.

Fast Student Loan Payback Methods

Now that we have covered the different repayment methods, we can move into the student loan payback methods that can equate to you getting your loan paid off in record time. Here are a few methods to get debt knocked out quick:

  • Saving For Retirement - This may sound weird, but saving for retirement is an excellent student loan payback method. By saving money for retirement, it is considered tax deductable, so at the end of the year, you will get money back just by saving for retirement, which you can use to pay off your loan debt. You can also take out the retirement funds and use them to pay your debt off as well. This student loan payback method is knocking out two birds with one stone.
  • Keep Living Like A Student – Since you have just graduated, you are used to living like a student, budget shopping and penny pinching. You should keep doing this, but now that you have a good paying job, unlike in college, you can save the money that you saved on budgeting, and use it to pay your loan debt.
  • Choose the Shortest Repyament Period – By choosing the shortest repayment period, you will pay your loan off in single digit amount of years instead of double didgits. Although payments will be higher, they will get you paid off faster as well as save you a lot of money in what you would have paid in interest if you would have choosen a longer repayment period.
  • Student Loan Forgiveness – This student loan payback method has been used by millions and can get out out of debt fast. These programs are offered by having your work public service jobs or volunteer work where they either will pay a percentage off your loan each year that you provide your service, usually 15 to 20 perent each year, or you work for a specific amount of time in these jobs, usually 5 to 10, and after you are finished, your loan debt is totally wiped clean.
  • Ask Your Employer To Help – This last student loan payback method can get you out of debt fast as well. Employers want to keep their employees as it is expesive to keep hiring new ones. You can ask them to help you by agreeing to work a specific amount of years with them. You also try a possible percentage off each year of work.

Student Aid Report

September 5, 2011

Student Aid Report

Student Aid Report

The goal of a Student Aid Report is essentially to gather information about you to determine what your EFC also known as Expected Family Contruibution (EFC) is going to be for the cost of college. So if you are going to be receiving a lot of help, then you will get less financial aid, and if you are going to be getting minimal financial help, than what you can get in financial aid will go up.

Student Aid Report – Major Overview

A Student Aid Report also know as a SAR is the summary of the responses that you filled out on your Free Application of Federal Student Aid (FAFSA), which if you don’t know what a FAFSA is, it is an application which determines your qualification for federal student aid, loans, grants as well as scholarships.  The Student Aid Report is sent to you after your complete the FAFSA, either through the mail, or if you provided your email address on the SAR, you will receive information through emial. When you complete your FAFSA, you can designate up to 6 schools to get your Student Aid Report.

If all the information you supplied on your FAFSA is completed in full, what will come back through email or mail will be a single page of information that contains :

  •  Your Expected Family Contribution.
  • Your DRN number which is what you will use to verify that you are actually you if you ever need to make changes to your application.

If you happen to not fill out any part of the FAFSA, your Student Aid Report will come back in the form of an 8 page packet in which will have the highlight the blanks that you have missed. You will need to fill in this information and send it back in, and remeber to sign the Student Aid Report if you haven’t already. To avoid this, check through your FAFSA mutliple times just to make sure you completed everything.

Getting your Student Aid Report

Once your have received your Student Aid Report, you need to check if there are any mistakes on the report. You can do this by comparing the FAFSA you filled out to your Student Aid Report. If you have any additional questions, you can feel free to contact the Federal Student Aid Information Center who can be reached at 1-800-433-3243 (1-800-4-FED-AID). They will be able to assist you with any changes or information that you need by providing your DRN number.

Student Aid Report – Selected For Verification

In the event that your Student Aid Report is selected for a verification process, which you will know as your SAR will say on the front page “You will be asked by your school to provide a copy of certain financial documents”. Instructions will be given if your Student Aid Report does require verification.

If you haven’t filled out a FAFSA yet, you can fill one out at the Department of Education website. After you are completed with the application, it is a long one just to give you a heads up, you will be mailed your Student Aid Report, within about 4 business days if you did it electronically or about a month if you decided to mail it in.

Forbearance Of Student Loans

September 4, 2011

Forbearance Of Student Loans

forbearance of student loans

Forbearance of student loans of essentially when a lender refrainins from enforcing the montly payments on your student loans. Forbearance of student loans can be an excellent option for if you are in a tough position financially as it is usually offered for up to 12 months, although there are other things that forbearance applies to. Forbearance of student loans not only can get you out of paying loan payments each month, it can also take away any delinquincy if you have it on your loan account.

If you qualify for forbearance, you do not have to pay a fee, but your interest will continue to build up on your loan, which you can pay each month, or pay later.  There are 6 different types of forbearance that can be used, discussed right below.

Forbearance Of Student Loans Requests

You can request 3 different types of forbearance for student loans, which are:

  1. A specific time in which you make no payments at all, which is usually a up to 12 months but sometimes it can be extended by 3 years.
  2. Extending your repayment period is another method of forbearance. This method will help save you money by allow you to pay your loans off from what is usually a 10 year period to anywhere between 12 to 30 years.
  3. The last student loan forbearance method is that you can request to make smaller payments for an certain time frame.

The Different Forbearance Of Student Loans Methods

You are able to receive forbearance for student loans if you fit certain requirements. The requirements are:

  1. If you are willing to pay your student loans but due to personal problems you are unable to do so. This method is for people who are making an effort and not skipping out.
  2. Serving in spefic internships as well as residencies like in the medical or dental feild.
  3. If you are in the military, you are also qualify for forbearance for student loans, as well as the possibility to receive forbearance if you have been in the military already as well as planning to enroll in the near future.
  4. If you are volunteering your time with a community service program. This program must be enlisted under the National Community Service Trust Act.
  5. If you are teaching as well as participating in a forgiveness program designated for teachers.
  6. You an also receive forbearance for student loans in the event that you are paying loan payments that equal 20 percent or more of your income.

Forbearance Of Student Loans Conclusion

This is a parital list of different forbearance for student loans options, which are more of the widely used methods. If the above doesn’t apply to what you though might grant you forbearance, the best thing to do would be to contact your lender as they can provide more information related to your specific information.

Student loan forbearance also should be requested in the event that you are not eligible for student loan deferment, as deferment should be your first choice. Deferment is similiar to forbearance for student loans arance in which you are able to postpone your payments for a certain amount of time for various reasons.

 

Unsubsidized Student Loans

September 3, 2011

Unsubsidized Student Loans

Unsubsidized Student Loans

Unsubsidized student loans are basically the opposite of subsidized loans in which you pay interest on your loan right out of the gate, as well as you do not have to prove that your at the utmost financially needy state as you do with subsidized loans. With the interest, one can either pay interest payments while in school or pay on them after school is over, but it is suggested that you pay while in school because it will accumlate on your loan total and make you pay more in the long run if you don’t. Unsubsidized loans are offered through 3 different loan programs being:

  1. The Federal Stafford Student Loan – 2012 and beyond, the interest rate will drop from 6.8 percent to 3.4 percent.
  2. The Perkins Student Loan – Loan interest rates are as low as 5 percent.
  3. PLUS Loans both for students as well as parents of dependant students
  4. For private lenders, unsubsidized student loans are all that they provide

How to Apply For Unsubsidized Student Loans

If you are looking to obtain an unsubsidized loan to help with schooling, there are a one thing in which you must do when it comes to applying. This one thing is filling out a Free Application of Federal Student Aid also known as a FAFSA. This application not only will figure out which loans you are eligible for as well as let you know if you qualify for any other government financial aid like grants and scholarships, which unlike loans, they never have to be paid back. This is imperative that you fill out a FAFSA and can provide much value to you in many forms of financial aid.

Repaying Unsubsidized Student Loans

Unsubsidized student loans repayment comes in 4 different methods that you can choose from depending on what your financial situation is as well as how fast you want to pay off your loans. Here are the 4 methods in which you can repay your unsubsidized student loans.

  1. Standard Repayment – This option allows one 10 years to pay their debt off with payments being the same each month.
  2. Extended Repayment – This method of repayment allows one 12 to up to 25 years to pay off their debt and you can start with very low payments with this option.
  3. Graduated Repayment – This payment method lets you start with a low monthly payment and it increases after a certain amount of time, usually being every 2 years.
  4. Income Sensitive – This option is fairly new and your montly payment is based off of how much you earn, which is usually 15 percent of your monthly income.

This is a main overview of what you will ecounter with unsubsidized student loans. Although unsubsidized student loans are offered with both federal and private agencies, it is a good idea to apply for federal unsubsidized loans first as they offer lower interest as well as are in general more lenient. If you are still looking to apply for an unsusidized loan for school than do it as soon as possible because funds are given on a first come first serve basis.

 

 

 

Deferment of Student Loans – Different Methods of Deferment

September 3, 2011

Deferment Of Student Loans

Deferment of stuent loans can be used in many different ways, but just to give you a feel for what it means, deferment of student loans is when both the borrower and the lender both come to an agreement that the borrower is going to postpone their payments on their student loan debt for a certain amount of time. Deferment of student loans is also a way that one can stop paying student loan payments without being penalized as well as sued. As said before, a person can use student loan deferment for many reasons, those reasons are listed right below.

Deferment of Student Loans

Deferment of Student Loans Methods

  1. Educational Reasons – This method of student loan deferment is where most if not all loan lenders allow you to wait until school has concluded to begin making your payments, usually this applies to those who are enrolled in at least a half time schedule. This method also applies to the 6 month grace period in which most lenders offer where for 6 months after you either graduated or dropped out, you do not have to pay monthly payments.
  2. Disability – Deferment of Student Loans is also offered to those who are disabled. The guidlines to obtain student loan deferment is that the injury is going to take you out of work for at a 60 day time period. There are other types of disability deferment of student loans like; complications during the birth process, taking care of a loved one which will take you away from work for at least 90 days as well as if you are attending rehab or something similiar to the above options.
  3. Unemployment – With this method of deferment, you must prove that you are unemployed as well as it requires that you have been actively searching for work. Other requirements for this deferment of student loans option is that you must be working with an unemployment agency as well as searching for work for the entire time of the deferment period which is usually around a 6 month timeframe.
  4. Economic Hardship – Deferment of student loans can also be applicable for those who are truly in a financial pinch. The requirement to be accepted to this type of deferment is that you are either working at least 30 hours at minimum wage rate, receiving public assistance, are making payments on a loan in which your monthly payment is 20 percent of your income or greater, as well as offering community service or intend to do so soon.
  5. National Service – Deferment of Student Loans through offering national service like through the military is also a great way to receive deferment. This option is great for those who are looking to go serve their country as well as be able to get most or their entire debt wiped away.
  6. Family Matters – This option is available for mothers who are have just given birth and need to attend to their children, parents who are either just going back to work or just leaving work to attend to newborns, pregnancy as well as attending to a newly adopted child.

Deferment of Student Loans Conclusion

These different deferment of student loans methods are some of the most used ways when it comes to stalling your payments for a while. If you need the deferement of student loans that you have, the best thing to do now would be to contact your lenders and set up a meeting with them where you will need to verify one of the above options. If the student loan deferment methods above didn’t touch on something else that you think it may grant you deferment, the best thing to do again would be to inquire about it through your lender.