Going to college usually includes a sum of debt to help pay for the tuition and college expenses a student might incur. In fact, in 2012 the average balance of loans for undergraduates was $25,900. (Johnston & Roten, p. 24, 2015) This can create a huge challenge for individuals as they exit college with such a huge amount of loans to repay. “Student loan debt rose by 328 percent from $241 million in 2003 to $1.08 trillion in 2013” (Johnston & Roten, p. 25, 2015). While financial aid is available, sometimes it can be confusing and the amount of debt can become unmanageable. This article focused on repayment plans for these high amounts of debt. With new repayment plans, students may find it easier to handle these debts. The two types of …show more content…
repayment plans discussed in this article were income-based repayment plans and loan forgiveness. Income-based repayment calculates the payment on income and family size. This can greatly reduce the amount of stress created with student loan repayment plans. The amount that is owed is more compatible with what the individual is capable of paying. There are three key characteristics of the income-based repayment plan. These three characteristics include monthly payments get capped at typically 10-15 percent of an individual’s discretionary income, loan length is 20-25 years, and any balance remaining at the end of the repayment period is forgiven. (Johnston & Roten, p.25, 2015). The other type of repayment plan is the public service loan forgiveness program. This program forgives student loan balances after 10 years of qualified employment (Johnston & Roten, p.25, 2015). Individuals have to work in a government organization, a 501 nonprofit organization, or other nonprofit organizations. In order to be considered for either one of these programs, individuals must have federal student loans. Being married and having dependents will also affect income level and have a direct effect on the income-based repayment plan. However if individuals are married and file separately the amount of the payment would be what individuals would pay as if they were single. One parent would also be able to claim any dependents, which in turn would lower the amount of the repayment. Another important tax consideration is the amount that is forgiven and through what type of program. If the loan forgiveness is granted through IBR, the amount of the loan that is forgiven is considered taxable income. (Johnston & Roten, 2015) This can have huge implications for individuals when it comes time to file their taxes. The count of income based repayments are started after the deferred time the student is in college and the grace period thereafter.
If an individual’s income is low enough, a zero payment may result using the IBR or PSLF program (Johnston & Roten, 2015). These zero payment periods do count as part of the 10 year repayment plan before loan forgiveness is granted. Both of these programs can be very beneficial for students with a high amount of student loans. With the new revisions to these plans, including basing repayment on income, can make student debt very manageable. These programs can encourage individuals to seek student loans, rather than private institution or credit card loans. I decided to focus on student loan debt management for this assignment, because this is something that I have in my personal life. In order for me to complete this master program, I had to take out a student loan. I have heard a lot of talk about the loan forgiveness plan, but have never been given any information about this. This article helped to clarify what is included and the requirements for the two different repayment options. These options both apply to me as I am a public service worker. I will use this information to help repay my student loan when it comes time to start paying after I graduate. Although I will need to look into these programs further, I feel that this article was very beneficial to my current
situation.
“The Good, the Bad and the Ugly of Student Loans” references many great points that recent college graduates or futures college graduates should follow. These include paying student loans fully and on time, as well as consideration of refinancing. The article’s main purpose is to help college graduates prepare to pay off their student loans carefully and correctly. It chooses to focus on the good points of paying off student loans, giving hope to those who may be worried about paying them off.
Consumers would have more money to spend and jobs would be created, increasing the opportunities for countless Americans. The Student Loan Forgiveness Act of 2012 is the best strategy for forgiving student loans. Educated Americans would be given relief after a reasonable repayment period. Student debts have troubled far too many graduates and their families. It would only be morally correct to free their debts after a ten year period while concurrently aiding the economy.
Along with scholarships, fellowships, and grants, student loans are an important method of financing post-secondary education. With tuition costs rising, more students are borrowing to pay for college education today. However, not all students realize the burden of paying back their student loans. Many are defaulting.
In recent years, there has been a tremendous increase in student enrollment in higher education after high school effecting the need for financial aid for all students. Education has become a growing part in America where more students want to better their lives with a college education. However, the cost of college tuition has increased and more students find themselves struggling to pay off the enormous tuition rates. In a recent study by the Consumer Financial Protection Bureau, student debt has reached $1 trillion in federal loan debt. Student loan debt has crippled the economy and students are struggling to pay off federal loans. In order to help students with the high tuition rates of college the government and universities offer
Eligibility for the forgiveness: President Obama has announced for this program a while ago. The eligible persons for this program will be the students working under the government for the last 10 years. In the middle of this time, you need to repay at least 120 payments.
Lucy , Lazarony. "Paying Off Your Student Loans with Forgiveness Programs." Credit.com. Credit.com , 13 Oct 2013. Web. 22 Apr 2014.
An education is one of the most important tools a person can acquire. It gives them the skills and abilities to obtain a job, earn a wage, and then use that wage to better their lives and the lives of their loved ones. However, due to the seemingly exponential increase in the costs of obtaining a college degree, students are either being driven away entirely from earning a degree or taking out student loans which cripple their financial prospects well after graduation. Without question, the increasing national student loan debt is one of the most pressing economic issues the United States is dealing with, as students who are debt ridden are not able to consume and invest in the economy. Therefore, many politicians and students are calling on the government to forgive their student loan debts so that through their spending the slowly recovering economy can finally return to its pre-2008 strength.
Student loan debt makes up a large portion of the debt in this country today. Many defaulted loans are the demise of high interest rates, poor resources to students in educating them on other avenues and corruption in the governmental departments that oversee education and financing. There are many contributing factors that lead to the inability to pay off student loans which need government reform to protect the borrower’s best interests.
It is a norm and expectation in society today for students to pursue higher education after graduating from high school. College tuition is on the rise, and a lot of students have difficulty paying for their tuitions. To pay for their tuitions, most students have to take out loans and at the end of four years, those students end up in debt. Student loan debts are at an all time high with so many people graduating from college, and having difficulties finding jobs in their career fields, so they have difficulties paying off their student loans and, they also don’t have a full understanding of the term of the loans and their options if they are unable to repay.
Fischer, Mary Claire. “Student Loan Forgiveness: What to Know.” MSN. 9 Oct. 2013. Web. 17 Feb. 2015
Make sure that your strategy with taking advantage to any loan forgiveness program is the smart one. Once you are done with you repayment plan it's possible that you will have little to no debt to be forgiven for. If you are paying for extra interest this might do more harm than good.
Over the last few decades, college tuitions and fees have increased by over one thousand percent, surpassing every category associated with the cost of living including food and medical. This unprecedented rise in cost has resulted in an avalanche of issues for young and middle-age adults. As, a result of steep student loan amounts, graduates are being forced to move back with their parents, fewer young people are becoming homeowners, they are delaying retirement saving, and are dropping out of college at an alarming rate of nearly fifty percent. With all the controversy surrounding the topic of increasing college cost, the revised income-driven repayment program has been created to help borrowers pay back student loans according to their income.
“Debt Burden: Repaying Student Debt.” American Council on Education. One Dupont Circle NW. Sep. 2004. Web. 12 Nov. 2011.
As of 2016, American students have accrued a massive 1.3 trillion in student loan debt. Just 10 years ago, the nation’s balance was only $447 billion (Clements). This ever-present cumulative burden has caused many post graduate Americans to delay important life events such as marriage, homeownership and children because of this substantial encumbrance (Clements). The debt will only continue to grow with neglect, so the most effective action to take would be eliminating the cost altogether.
One of the biggest challenges students who are in debt face is getting out of it. Though it is not easy, there are ways of getting out of student loan payment if a student finds themselves unable to pay them. One option is the Income-Driven Repayment Plans where a student can stretch out their payments for 20-25 years and any balance at the end will be forgiven. This may sound great but depending on a student’s situation, could cause a student to lose for money in the long run. People who work in public service for at least 10 years can apply for the Public Service Loan Forgiveness if they qualify. If a student becomes a full time teacher in a low income school they may be eligible Teacher Loan Forgiveness. Some loaners provide loan forgiveness