The Obama Student Loan Forgiveness Program is officially known as the William D. Ford Direct Loan Program which created Direct Loan Program reforms applying to federal loans. In 2014, federal loan borrowers qualified for payments basing on ten percent of their discretionary income. The money collected are primarily intended to increase college funding and for funding poor and minority students. The subsidies are no longer given to private lending companies by the federal government for federally back loans. When it comes to Obama Loan Forgiveness, loan borrowers have the opportunity to consolidate all loans into a single loan, taking advantage of affordable repayment plan.
The Direct Loan Program is offering several repayment plans such as graduated repayment, income based (IBR), standard repayment, income contingent (ICR), pay as you earn (PAYE), and revised pay-as-you-earn (REPAYE). In a graduated repayment plan, payments are made lower than the standard repayment plan but are increased every two years. The payments of borrowers in an income-based repayment plan are based on their income and their family size, wherein borrowers are expected to pay fifteen percent of their discretionary income, so they can enjoy as low as $0 a month. In a standard repayment plan, borrowers pay a fixed amount each month until the loan is paid, and the amount of payment usually depends on the loan term, amount, and the interest rate. In an income contingent repayment plan (ICR), borrowers can also enjoy as low as $0 a month, and payments are made depending on the income of the borrower, borrowed amount, loan balance, family size, and interest rate. Although the requirements are more difficult than other repayment plans, Pay As You Earn (PAYE) has the lowest monthly repayment plan that is based on the borrower’s annual income, using the ten percent discretionary income. Revised Pay As You Earn (REPAYE) gives substantial relief to many federal loan borrowers who are not eligible for the Pay As You Earn (PAYE) because of strict requirement.
You can also take advantage of public service loan forgiveness with a period of ten years if you work in the public sector, unlike twenty to twenty-five years for standard loan forgiveness program. For more information about student loan forgiveness processing, feel free to check our website or homepage. Repayment of loans is really daunting and challenging especially if you need to keep up with a budget every month, but check your options with us, and find out how you can be free of heavy payments. Talk to us and we will help you out.3 Lessons Learned: Program