Tag Archives: StudentDebt

Enrolled in Income-Driven Repayment? Avoid This Nightmarish Student Loan Repayment Mistake

We have blogged extensively about income-driven repayment plans (IDR) plans for eligible federal student loan borrowers. The Department of Education offers four income-driven repayment plans to eligible borrowers; Income-Based Repayment (IBR), Income-Contingent Repayment (ICR), Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAYE). Each plan has different requirements and repayment structures. However, there is a universal rule for all four plans – you must recertify your income each year. Some people forget to recertify, and the consequences are horrific. Income-driven plans limit your monthly payments to a percentage of your discretionary income. For instance, let’s say that you earn $37,000 a year, are enrolled in the IBR plan, and pay $117 each month on a $75,000 student loan balance. If you failed to recertify by the due date, then your payments could revert to what they were under the standard 10-year repayment plan. This means you could…
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Jobs That Qualify for Student Loan Forgiveness

Private and federal student loan debt currently stands at $1.6 trillion. Many borrowers struggle to make payments, and some studies suggest the default rate on federal loans could hit 40 percent by 2023. However, there are many payment options that can help federal student loan borrowers avoid default. There are also programs in place that can help federal borrowers receive loan forgiveness for working in certain types of jobs. Below, we have included more information about the types of jobs that qualify for forgiveness under certain programs. Federal, State and Local Jobs If you work for a federal, state or local entity, then you may qualify for the Department of Education’s Public Service Loan Forgiveness (PSLF) Program. Examples of qualifying jobs could include working for the FBI, CIA, state legislature or as a police officer for a municipality. However, there are additional requirements that are notorious for creating confusion. For…
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What to Know About Recertifying Your Income-Driven Repayment Program

The Department of Education offers four income-driven repayment (IDR programs) programs for federal student loan borrowers (IBR, ICR, REPAYE and PAYE). These programs limit your monthly payments to a percentage of your discretionary income. However, there is a universal rule that applies to these four programs—you must recertify your income each year to stay enrolled. Whatever you do, do not forget to recertify by the deadline! Here is a  hypothetical example which demonstrates some of the consequences of forgetting to recertify your student loans. What Could Happen If You Do Not Recertify Let’s say for example that you are enrolled in the IBR program, which limits your monthly payments to $117 per month. Your monthly payments under the standard 10-year repayment option would be $480 per month. You are also enrolled in automatic payments through your loan servicer, meaning your checking account is auto-debited each month. Then, for whatever reason,…
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