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. 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’ll need to cover the costs of your student loans after you graduate as payments will begin to kick in. If you only have one student loan, then that would be much easier, but in reality, you have multiple loans, so repaying it will be much difficult. 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. It is a good thing that this can now be simplified with a small dose of organization, and you only need to know the minimum amount of each loan and its due date so you can write it down or just create a direct debit account so the payment will just be obtained from your account.
One way to reduce your loan is by availing of Federal Direct Loan Program or Obama Student Loan Forgiveness. This program is offered for all types of federal student loans and does not apply to private loans. There are a lot of benefits a borrower can get by taking advantage of Obama Student loan Forgiveness such as the ability of consolidating all federal student loans into just a single new loan, and the consolidated loan can be repaid using a preferred repayment plan which is more affordable. 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. 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. Income based repayments are based on the borrowers’ family size and income, not considering the interest rate and loan balance. 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.
As a student loan borrower, finding out your loan’s grace period is also important. 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.