In, 2009, the former William D. Ford Direct Loan Program was renamed as Obama Student Loan Forgiveness Program, creating reforms to the Direct Loan Program applying for federal loans. Federal loan borrowers were already qualified for payments basing on 10% of their discretionary income beginning in 2014. The money that is collected are mainly used in increasing college funding and for funding poor and minority students. Private lending companies no longer receive subsidies from the federal government for federally backed loans. There are many benefits that federal loan borrowers can enjoy through Obama Loan Forgiveness Programs, wherein they can make a consolidation of all their federal loans into one, taking advantage of affordable repayment plan.
There are different types of repayment plans available under the Direct Loan Program including graduated repayment, income contingent (ICR), pay as you earn (PAYE), income based (IBR), standard repayment, and revised pay-as-you-earn (REPAYE). Payments are made lower than the standard repayment plan but are increased every two years in a graduated repayment plan. When it comes to an income-based repayment plan, borrowers are made to pay according to their income and the family size, wherein borrowers are expected to pay fifteen percent of their discretionary income and 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. When it comes to income contingent repayment (ICR), it depends on the borrower’s income, borrowed amount, loan balance, interest rate, and family size, and borrowers can enjoy as low as $0 a month. Pay As You Earn (PAYE) is the lowest monthly repayment plan that is based on the borrower’s annual income, using the ten percent discretionary income, as compared to other plans, the requirements are more difficult. Because of the strict requirements of Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE) was made to give a substantial relief to many federal loan borrowers.
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. We completely understand the importance of repaying your loans, and it is really hard especially if you are on a tight budget, but choosing the right repayment plan will help you a lot. We are always ready to assist you with all of your questions and concerns, feel free to check us out, and we’ll help you out!How I Became An Expert on Student