Obama Student Loan Forgiveness Update
Student debt in the United States has accumulated to a staggering $1.2 trillion, affecting some 41 million Americans. There’s a good chance if you are reading this, you are one of them. You may have heard by now of Obama’s student loan forgiveness programs, established to assist borrowers such as yourself with this national crisis. At the beginning of 2016, a new program was released in addition to the programs previously available for federal student debt forgiveness.
The REPAYE program is the new addition to the student loan forgiveness programs available in 2016. REPAYE, which simply stands for Revised Pay As You Earn, will allow around 5 million more Direct Loan Student borrowers to cap their monthly student loan payment amount to 10 percent of their monthly discretionary income, regardless of when the loan was originated. The REPAYE Plan drastically improves upon the current Pay As You Earn Program while extending its protections to all student borrowers with Direct Loans. If you were previously unable to qualify for student loan forgiveness, you may qualify now under this new program. To see if you qualify, give us a call at (800) 940-8911.
In addition to the monthly payment cap, REPAYE will forgive any remaining debt after 20 years for those who borrowed only for undergraduate study, and 25 years for those who borrowed for graduate study.
There are now 6 federal student loan repayment programs in 2016:
- Standard Repayment: The borrower is set a fixed monthly payment for the life span of the loan.
- Graduated Repayment: The borrower can make lower payments in contrast to the Standard Repayment plan, but the payment amount slowly increases over time.
- Income-Contingent Repayment (ICR): Payment amounts are determined by income, family-size, student loan balance, and interest.
- Income-Based Repayment (IBR): Monthly payment amount is contingent solely on the borrowers income and family-size.
- Pay As You Earn (PAYE): The lowest plan based on income, wherein 10% of the borrowers discretionary income is used as payment.
- Revised Pay As You Earn (REPAYE): This program improves upon the previous Pay As You Earn Plan, while extending its availability to all student borrowers with Direct Loans.
More repayment options may be available in the future, as the federal government continues to address the student debt crisis. Confused? For a full understanding of all the loan type repayment programs and to see if you are eligible for student loan forgiveness, give Goodbye Loans a call at (800) 940-8911.