Obama Student Loan Forgiveness

With the increasing concerns about student loan debts in the country, President Obama has introduced a plan that aims to help students who are incapable of completing their loan payments, as well as those who have paid a significant percentage of their loan balance for several years.

Are You Eligible? – Verify Eligibility Here 

verify eligibility for obama student loan forgiveness Obama Student Loan Forgiveness

(Help Is Available to Confirm Eligibility – Click Here)

This plan is called the Obama Student Loan Forgiveness, which clears all remaining debts of individuals who have made regular and prompt payments on their existing federal student loans for at least a period of twenty years. Additionally, those who work in government departments such as the military service may have all their debts cleared earlier than the minimum year based on the student loan forgiveness plan.

Important Elements of the Obama Student Loan Forgiveness

Pay-As-You-Earn or Student Loan Forgiveness is a program that calculates the loan payments made by borrowers with consideration to their family size and income. Since the basis of this program is not your loan payments, it is possible for borrowers with low income and massive loan balances to complete their payments.

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Those who are eligible for this program can have their monthly loan payments capped at about 10 percent of their income. For instance, individuals who earn $50,000 annually and have an existing loan debt of $40,000 at 6.8 percent APR are usually required to pay at least $460 per month on the standard repayment scheme.

However, they may only settle a monthly payment of $277 if they are eligible for the Pay-As-You-Earn plan. Thus, borrowers can benefit from low payments, unlike with other repayment plans for federal student loans.

It is also important to note that not all borrowers may qualify for this student loan forgiveness plan. In fact, only those who are new borrowers with an existing federal direct loan may be eligible, or individuals who have taken out a loan on or after October 1, 2007.

Moreover, you must have obtained your direct loan after October 1, 2011, so it is essential to know the exact date when you have taken out your loan to determine your eligibility. Pay-As-You-Earn is also not available to borrowers with default student loans, so you need to consult your loan servicer for the best solution regarding this concern.

In addition, you should understand that the loan is likely to take longer before it could be paid off because of lower monthly payments. Hence, the accumulated interest involved in the Pay-As-You-Earn plan is much higher than when you opt for the standard repayment scheme.

Further Details about the Obama Student Loan Forgiveness Program

The plan only applies to individuals who currently have federal loans such as the Stafford or Perkins loan. Although those who have an existing private loan can use a student loan forgiveness plan offered by private institutions and employers, these are not covered by the federal program by President Obama.

Furthermore, there are some employers in private companies and institutions who will agree to repay the full amount or remaining debt if you comply with their conditions. For instance, you may be required to work for the company for a period of time stipulated in the agreement. Although this plan typically applies to those who work in healthcare companies or other specialized industries, several private firms have different policies when it comes to student loan forgiveness plans.

Important Considerations

The main goal of the loan forgiveness program by President Obama is to alleviate and reduce financial burdens among college students and graduates. After all, a college degree is almost useless when a person who holds it faces massive loan debt balances that he or she can never pay off.

Moreover, the primary objective of the program is to assist students by making them free from debts as quickly as possible. With financial assistance and a better repayment scheme, it is possible for students to focus more on getting a degree instead of paying off their debts for decades.

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Bottom Line

The Pay-As-You-Earn program by President Obama enables borrowers who experience financial difficulties a chance to obtain a more reasonable loan repayment option. However, there are certain requirements that borrowers should meet before they can qualify for the program. Hence, it is best for students to consider all possible payment schemes that will be applicable to their situation. By doing so, they can determine the most suitable option that works for them.

Are You Eligible? - Verify Eligibility Here 

verify eligibility for obama student loan forgiveness Obama Student Loan Forgiveness

(Help Is Available to Confirm Eligibility - Click Here)

Comments

  1. John B. Egan says:

    It’s very nice that the government will relieve the burden of absurdly high student debt for those that were ‘lucky’ enough to keep a job during the downturn, but what about all those displaced by the greed of our banking industry and our monster recession that have been displaced and couldn’t keep up their payments? Many of these are and were solid members of society and are now being penalized because of the mess made by other people….most of whom seem to have done very well off it BTW.

  2. This is an irresponsible government program. As someone who payed for graduate school himself, I am appalled. I should have taken out a government loan. I am tired of ants paying for grass hoppers. No wonder the country is broke.

  3. We don’t have a forgiveness program like this in Canada. This is quite controversial – whether or not this is fair or whether tax payer dollars should be spent on this. It will be interesting to see whether Canada’s government follows Obama’s example after the dust settles about this.

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  1. [...] people in need of an education. For USA citizens nowadays it is easier to get loans and pay them, Obama student loan reform is a great reform made for students so any of USA citizens can afford to go to colleges and [...]

  2. [...] expenses especially if you were aware of great deals on how to travel on a student budget. The Obama Student Loan Forgiveness program has awarded many students the luxury of traveling abroad. Another program that has [...]

  3. […] President Obama has signed a law that aims to help students pay back their federal college loan debts. Beginning in 2014, borrowers are allowed to pay off no more than 10 percent of their income. The student loan reform act of 2013 allows any existing debt to be forgiven only after 20 years. Moreover, those who work in the public sector such as nurses, members of the armed forces and teacher qualify for loan forgiveness after 0 years, as long as they make their loan payments on time. Verify eligibility for Obama loan forgiveness here http://www.graduatingfromdebt.com/2013/06/02/obama-student-loan-forgiveness/ […]

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