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Student Loan Debt Relief & Consolidation: 9 Best Programs to Get Out
Ways to Get Student Loan Debt Relief
- Standard Repayment
- Graduated Repayment
- Income Contingent Repayment
- Income-Based Repayment
- Pay As You Earn
- Interest Forgiveness
- End of Term Loan Forgiveness
- Public Service Loan Forgiveness
- Teacher & Disability Forgiveness
College loan and student loan debts are the fastest growing type of debt in America. Millions of people have taken out student loans, recognizing that a college degree is the best way to get a better job. However, economic difficulties and the growing cost of college have put many borrowers in a precarious situation. Many people are struggling to pay back their student loans, but can’t seem to get ahead. We’ve put together this guide to help you understand some different options available to those looking for student loan debt relief.
Student Loan Repayment Options
The first, and most common, type of debt relief involves different ways of repaying your loan. Federal rules and regulations stipulate that federally backed student loans must offer different types of repayment options. These options can help reduce the amount you pay each month, and can make it possible to get back on track with your student loan debts.
Standard repayment isn’t really a debt relief option. This is the normal system of repayment where you repay your loans according to the original terms of the loans. Many borrowers who are enrolled in a standard repayment option don’t realize there are better options available to them.
A graduated repayment system is the first step towards managing your student loans. A graduated repayment plan means that your payments start off small, but increase every two years. Therefore, you’ll have time to find a job that will allow you to cover your loans before making larger payments.
Income Contingent Repayment
An income contingent repayment plan, or ICR, borrowers make payments according to a set of factors. These factors include income, your family, the balance on the loan, and the interest rate. Payments can be as low as $0.00 for ICR borrowers.
In an income-based repayment plan your student loan payment is determined by your income and family situation. This differs from an income contingent repayment plan in that the loan balance and interest rate are not factored in to the bill. Students on an IBR are expected to pay 15% of their discretionary income to their lenders. These payments can also be lowered to $0.00
Pay As You Earn
The Pay As You Earn, or PAYE plan normally has lower monthly payments than the other repayment options. It is based on your income, but rather than the 15% you’re expected to pay with the IBR, you’re only required to put 10% of your discretionary income toward your student loans. This repayment plan is the most difficult to qualify for, but it too can reduce your payment to $0.00
One of the most helpful options for student loan borrowers is the interest forgiveness program. This program is open to those who took out a subsidized direct loan from the federal government. Most student loans fall into this category. Even if your loan is serviced by another company, like Great Lakes, Navient, or American Education Systems, you still might have a direct subsidized student loan.
The interest forgiveness program means that your interest is not capitalized on your student loan for the first three years of repayment. As a result, student borrowers can save thousands of dollars while keeping their loan balances lower than they otherwise would be. This makes interest forgiveness an excellent option for student borrowers, especially recent graduates who are having a hard time finding a job.
End of Term Loan Forgiveness
Another benefit of recent federal laws concerning student loans is that those in an income contingent, income based, or pay as you earn repayment plan can have their loan forgiven when the loan’s initial term ends, even if they still have an outstanding balance. Most student loans have a term from 20-25 years, depending on the amount that was borrowed and what repayment plan you signed up for.
It’s important to note that there are qualifications and limits for this option. Borrowers are not eligible if they have been seriously late or defaulted on any of their student loans. Moreover, the amount that can be forgiven depends on factors like how much you earned and how your earnings changed over the course of the loan’s initial term.
Public Service Loan Forgiveness
In an effort to increase involvement in public and community service, various governmental and private interests have established loan forgiveness options. To qualify for these programs you must work in the public sector and be in an IBR, ICR or PAYE repayment plan. The advantage of these programs is that your loan can be forgiven after a much shorter time than the end of term loan forgiveness option. Typically, borrowers can have their loan forgiven after 120 payments, or 10 years. This stands in stark contrast to the 20-25 years that the end of term loan forgiveness plan uses.
Teacher & Disability Forgiveness
These aren’t the only programs that provide options for student loan forgiveness. There are special programs for teachers to have their student loans forgiven. One example of these programs is Teach for America. People who enroll in this program agree to teach for a certain number of years at an at-risk school. In addition to the standard job compensation, the program will waive all or most of your student loan balance once you’ve completed your contract with the school.
Additionally, you can get loan forgiveness if you’ve become disabled since taking out your loan. This process is known as Total and Permanent Disability Discharge. Your disability must prevent you from working in the field of your selected degree. For example, if you had studied to be an author, but lost a hand in an accident, then your student loans might be forgiven.
As you can see, there are lots of ways to deal with student loans. Make sure that you’re operating on a payment plan that helps you, and be sure to ask your student loan servicer what options are available to you. It’s always better to talk to the loan servicer if you get into trouble than to default or miss loan payments. Use these helpful programs to move past your student loans and start building a life.
Student loans have become so normal that it is actually surprising when you find out that a new college graduate does not have a debt to pay. There are, however, many ways to make student loan payments a bit easier. Read on below to find out how.
Student Debt Relief Basics
Can we really have ways to make paying our student loans easier? Find out below:
Is student debt relief real?
Yes. Simply stated, debt relief just describes the various ways a student can get out of his or her loan.
Is the Obama student loan debt relief real?
Does student debt relief work?
What is the student debt relief program?
What is student loan debt relief tax credit?
It is a form of tax credit program being implemented in Maryland for students who qualify under a particular criteria, such as the amount of loan, payment of tax in the state, and others. Be sure to read tax debt relief company reviews thoroughly before seeking help with these types of debts.
What is a student debt relief group?
How to pay off student debt in 6 months?
This will depend largely on the amount of loan, its maturity, and the financial situation of the student. The larger the loan amount, the longer it will take to pay it off. Debt relief companies may be able help shorten this some. This is why we wrote about Freedom Debt Relief BBB reviews and other companies so you can make a more informed decision.
How to pay off $250,000 in student loan debt?
How to settle your student loan debt?
How to pay off large student loan debt?
The most important aspect is cleaning up your spending habits. Next is knowing what debt relief options are available for your particular financial situation. Plug some numbers into a debt payment calculator to see how long it will take with different payment amounts.
How to get student loan debt relief?
How does student debt relief programs work?
Debt relief programs make payments easier either by lowering monthly payment amounts, lowering or eliminating interest rates, or forgiving loans entirely. Check out our National Debt Relief review and see if they would be a good fit.
How to pay off student loan debt in 5 years?
How to improve credit score with student loan debt?
Learn what is debt consolidation and how it can help or make it harder for you to pay your student loans.
Can you consolidate credit card debt with student loans?
Yes. You can even use student loan to pay off other types of loans, but this is not advisable since this is a sign of a bad spending habit. There are a number of options including credit card debt settlement that you should research thoroughly first. Read more about the best way to consolidate credit card debt.
How to consolidate student loan debt?
Does debt consolidation include student loans?
Can debt consolidation help with student loans?
Depends. Consolidating loans allows you have just one payment responsibility and simplify your finances, but you may also incur higher interest rates because of a bigger principal amount after consolidation. If you choose to go with professional services just be sure to only look at debt consolidation companies BBB accredited.
Should I consolidate my student loan debt?
If you want to refinance or extend your loan term, then you can consider consolidation your student debt. But it can also cause you to pay more in the long term. If you’re struggling to pay multiple debt types you can also look into debt management programs.
Does consolidating student loan debt hurt credit?
How does student loan debt consolidation work?
What do you need to consolidate your student debt?
Why consolidate student loan debt?
When to consolidate student loan debt?
Where to consolidate student loan debt?
What happens if you consolidate student loan debt?
Is debt consolidation good for student loans?
How to consolidate credit card and student loan debt?
To consolidate both credit card and student loans, then you may need to apply for a personal loan and use the proceeds to pay off each account. There are plenty of credit card relief options available to you.
Student Loan Quick Facts
Know the important figures and information about student loans.
What is the average student loan debt?
According to Forbes, in 2016, the average student has a debt of $37,172, which is a very huge concern for the government.
How much student loan debt is too much?
This really depends on the student. But as a general rule, any amount that you can’t pay on time or without acquiring more debt is too much.
How to get out of student loan debt without paying?
While this isn’t recommended, it is possible. We talk about this more in depth in another article about how to get out of debt. You can work for the government and avail of the public service loan agreement, or you can apply for a disability discharge in the event you become disabled.
How to reduce student loan debt?
How to get out of student loan debt fast?
How much student loan debt is there?
How many college students are in debt?
Am i responsible for my spouse's student loan debt?
What happens to student loan debt when you die?
Is student debt worth it?
Do student loans count towards debt income ratio?
Why is student loan debt so high?
How to avoid college student debt?
How to overcome student loan debt?
How to get rid of student loan debt?
Where can I find my total student loan debt?
How does student loan debt affect the economy?
Will student debt be forgiven?
Are deferred student loans included in debt to income?
What is the average student loan debt for graduate students?
How to invest in student loan debt?
How to discharge student loan debt?
How much student loan debt can I afford?
Should I buy a house with student loan debt?
Is student loan an unsecured debt?
Why is student debt bad?
Are student loans marital debt?
Can you inherit student loan debt?
How much student loan debt is reasonable?
What is the average student loan debt for a doctor?
Is there a statute of limitations on student loan debt?
Does student loan debt expire?
Who qualifies for student loan debt forgiveness?
Is cancellation of student loan debt taxable?
Can you refinance student loan debt?
Can I file bankruptcy on student loan debt?
Can I join the military with student loan debt?
Yes. In fact, if there is a possibility that your student loan might be completely forgiven if you join the military, which is an act of serving the state. Learn more about government debt relief programs.
Can student debt impact your credibility?
When will my student debt be written off?
Can student loan debt take your tax refund?
What percent of college students graduate with debt?
Elizabeth is an expert on Debt Consolidation as she provides helpful advice to people who are dealing with debt problems. She graduated college with a BS in Finance. After college, she took a job working at a non-profit debt counseling program. It was at this position where Elizabeth honed her expertise for helping people understand how different financial products work and finding ways to help people pay off their debts.