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The New Obama Student Loan Forgiveness Program

Obama’s student loan debt forgiveness plan

The promises that a quality college education will guarantee a great paying job are lost with a downturn of the U.S. economy. The unemployment rate has remained above 9% for the last two years as employers are practicing a hiring freeze or reducing their payrolls. In the last several years, college students have spent thousands of dollars in college tuition to get a quality education and a degree that promises to pay these loans back. Now these graduates cannot find the jobs they need to fulfill their obligations.

Graduates having trouble paying their student loans have many options. Some of these options include deferments and forbearances, where payments can be postponed for any number of reasons until graduates can find a job and begin earning income.

Another option has also been recently made available. The Obama student loan forgiveness program can help help those student that have too much student loan debt. Under this plan students that are making satisfactory payments for twenty years can have their remaining loan balance forgiven, regardless of how much it is. What’s even better news is that people that work in public service, such as teachers, can have their remaining loans forgiven after 10 years, which is good news for public service workers in Georgia.

The Obama student loan forgiveness program covers student loans like FFEL, Stafford loans, Direct loans and the Perkins loans. It is not covered for private student loans. Georgia residents should fill out the application for the Obama student loan forgiveness program sooner rather than later. The ten year repayment period begins as soon as the application is completed and signed. Those people who are already in public service cannot count their previous years of service.

Another option many graduates can take advantage of is the income sensitive repayment plan. This repayment plan limits your monthly student loan payments to 10% of your total income after taxes and other basic expenses are taken into consideration. This is the one solution for many college graduates that are facing limited income after graduation. In some cases, if income is low enough, the monthly student loan payment can be zero, but it can still count towards the 120 qualifying payments.

While many Americans will attempt to put their student loans into deferment or forbearance, it’s worth doing a little bit of research to find out if you qualify for the newly passed student loan forgiveness program. In fact, you may discover any number of programs that could apply to your situation should you not qualify for the new Obama plan. The last thing anyone should do is allow their loans go into default as this would disqualify any type of repayment plan. Making payments on any plan also gives a person the chance to save or rebuild their credit score too.

Many Americans have student loan debt and are making payments over many years. The student loan debt forgiveness plan can help by limiting the duration of the loan payments for 20 years or even cut it in half for public service workers. Even better is that many students can take advantage of the income sensitive repayment plan and have their monthly payments reduced even further.

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Comments

  1. maria tamez says:

    I am a 61 soon to be 62 single women. I was granted a loan with Salie Mae. I went to school to become a medical assistant after I
    was laided off from ADT security, was a nation wide layoff. I enjoyed so very much going back to school at the age of 50, made the
    deans listed. However I was not aware that a lot of doctors did not insure their employees. Worked for an orthopedic doctor for one year. while working with that dr. I found out I was border line diabetic. I than knew I had to find a job with ins. benefits. went to work for gwinnette county. That job does not pay well. I did not have any intention of staying with county, however one year later my daughter gave birth to my first grandchild which I adore. my daughter took off and left the baby with my ex. very hard emontionaly I knew I could not handle a higher paying job with much more responsibilys. when my grandchild was 2 we lost him to his dad. it was very hard just to get out of bed and go to work let alone look for a higher paying job. well just as I was getting back to myself the recession came about. I held on to my job, as we had people with degrees applying for the position I am in with the county. I am probably going to retire once I complete 10 yrs with the county, that at least give me a small pension so it will at least cover my ins. I am Hispanic and first generation here in this country, I love this country and would not want to live anywhere else in the world.
    If my loan cannot be forgiven I am requesting at least some kind of reduction. I am striving to be debt free when I retire. Thank you so much for taking the time to read this request, may God bless you as he has me.

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