Student Loan Forgiveness Program

Published on June 2016 | Categories: Types, Presentations | Downloads: 49 | Comments: 0 | Views: 263
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The student loan forgiveness program has earned popular nickname from the borrowers. Owing to President Barrack Obama’s stupendous efforts in making higher education easy and affordable, the Direct Loan program is now called as Obama Student Debt Forgiveness program.

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Content

How
Obama’s
idea gave
boost to the
Direct Loan
Program
with
Forgiveness
Schemes

The student loan forgiveness
program has earned popular
nickname from the borrowers.
Owing to President Barrack
Obama’s stupendous efforts in
making higher education easy and
affordable,
the
Direct
Loan
program is now called as Obama
Student
Debt
Forgiveness
program. It is worth mentioning that
the Direct Loan program actually
derives its origin from William D
Ford, who transformed the scene
of American education.

The direct loan program was
restructured in the year 2009 to
accommodate new ideas and
loan benefits. The Obama
Student Debt Forgiveness was
first included in the Health Care
and Education Reconciliation
Act of 2010 which covers all
federal student loans. The
private loan borrowers remain
eluded from enjoying the
benefits of the student loan
forgiveness program.

Features of Revised Direct Loan program
 The

student loan forgiveness program that is available today
boasts of incredible features considering the highly fluid set-up
of the education system in USA.
1. Student loans will not attract any more subsidies from the
federal agencies.
2. The private lending institutions offering federally-backed loans
won’t be able to ask for any subsidies from the federal
government.
3. The forgiveness program began from 2014. The borrowers
who new loans form the 2014 portfolio can make repayments
based on the restructured student loan forgiveness program.

4. The repayments will be equated to the discretionary income set at
10 percent.
5.New borrowers will enjoy shorter eligibility term. The student loan
forgiveness is now reduced after 20 years of repayment on the
qualifying loan payments instead of the earlier term of 25-years.
6.The repayment amount is now directed to fund poor communities
who don’t have access to education. It has definitely been designed
to raise the volume of college funding without putting pressure on
state funds.

odes of making payment in a Direct Loan Program
Borrowers can now enjoy a more defined and affordable modes of
loan repayment. The borrowers can derive benefits from the student
loan forgiveness program with the option of consolidation of all
federal student loans into on single loan. The student loan
forgiveness program offers fourdiversified loan repayment plans.

-Standard Repayment: Choose the standard
option to pay a fix sum every month till the loan
term stands. The amount to be paid every
month is deduced from the loan sum and
interest rate.

-Graduated Repayment: This mode of
repayment is a progressive structure that allows
the borrower to make higher payments with
time. The repayment sum beings with a small
amount usually lower than the standard
repayment value. The amount remains constant
for the first few years before gradually
increasing thereon every two years.

-Income
Contingent(ICR):
The
borrower can enjoy repayment with
income-linked mode called as ICR.
The value of loan repayment is also
based on the family size and number
of dependent members. Borrowers
can begin with zero.
-Pay-As-You-Earn: PAYE offers the
borrower the lowest monthly loan
repayment based on the income.
Instead of the 15 per cent IBR rate,
PAYE is equated as 10 per cent of the
discretionary income.
The forgiveness amount can save millions of dollars in the first few
years for students with a normalized, affordable interest rate.

s
U
t
c
a
t
n
Co
Student Debt Center
Cesar Buitrago
Address - 18459 Pines Boulevard, Suite 532,
Pembroke Pines, FL 33029
Contact No. - 800-551-7187
Email Id - [email protected]
Website - http://studentdebtcenter.org/

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