Guest Post by: Stephen Rhett
Student loans are now becoming more of a problem than a help for those who are going for higher education. Loans have never been a breeze for the borrowers and now, with the economy taking deep plunges, it is becoming more of a burden.
For the students these spell more of a trouble as they have the capacity to completely ruin their future if steps are not taken on time. Given below are some of the means of paying off the loans with ease and stopping them from becoming defaulted.
Income Based Repayment Plan
According to the new income based repayment plan introduced by the federal government, you can have your monthly loan payments adjusted according to your income and the size of your family. Also if you are working in a non-profit institution or for the government hen you can have the rest of your loan forgiven after about 10 years of regular payment.
Graduated Repayment Plan
If you do not qualify for an IBR plan then you can at least ask for a graduated repayment plan. Under this plan, you will have to pay a reduced amount for a set period of time. Then the amount will increase according to your monetary capacity. This is useful only if you are sure that there will be a positive change in your income in the set time period.
If you are going through a brief financial constraint then you can ask your lender to allow you a deferment on your loan. This would mean that you do not have to pay for a certain period of time. Find out if the interest will be added up for these months. Ensure that you make the necessary financial arrangements so that you are able to pay the amount once the repayment period sets in.
Special Program for the Teachers
If you have about $17,500 as the principal in your Stafford loan then you can have your interest forgiven after about 5 years of teaching in the lower-income or other specific regions approved by the federal program. For details you have to talk to your lender. This is a part of the student loan forgiveness program.
The federal student loans have a bunch of flexible repayment plans for the borrowers and they have been especially designed for these financially hard times. Therefore, while taking a student loan it is always best to go for the federal ones as they are more borrower-friendly.
The author Stephen Rhett has a deep interest in the plight of the students who are bogged down by the responsibility of paying back their education loans. Here, he talks about how the student loan forgiveness program can help them.