5 Reasons why Obama Student Loan forgiveness is a Big Hit

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5 Reasons Why Obama Student Loan forgiveness is a
Big Hit
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Though the economists are blaming the Obama loan
forgiveness program for the increased tax
liability on the citizens, the scheme is still a
big hit. President Obamas pet education fund
program allows the student loan borrowers to pay
off their loans as a set share linked to their
discretionary income. Here are 5 reasons why the
Student Loan forgiveness program is such a big
hit among the Young US turks.
1. Expensive Idea, But Still a Good Law The
forgiveness program doubles up as a Free
community college. The only difference You can
choose the best institutions without worrying
about the rising educational costs. The laws of
the loan repayment apply to all the student loan
borrowers uniformly. If you have taken a loan
before October 2007, the benefits are applicable.
Soon, the law will cover every loan borrower.
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2. Choose Your Own Loan Repayment Mode You can
pay out the loan amount using the Income Based
repayment model. You can adopt a zero percent
share or give away up to 10 percent of your
monthly income towards the repayment of the
student loan. In 20 years, you can earn the
forgiveness from the loan agency. The forgiven
amount however will be taxable as per the current
legislation. It is a smart repayment model if you
wish to earn forgiveness in teaching and nursing
profession serving as public sector employee.
There are specific loan forgiveness for nurses
and teachers program. Forgiveness comes in 10
years with no additional tax charged in the
forgiven amount.
3. IBR is Preferred by all Employed Borrowers If
you are wondering that the IBR is suitable only
for low income borrowers, you are far moved from
reality! IBR is a great benefit for middle as
well as high income borrowers who have done their
graduation using the loan benefits. You can test
your eligibility and benefit plan by effectively
testing the debt-to-income slab. There is no
formal limit to the income slab though.
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4. Reduced Payments Means Stretched Term The
Federal education loan agencies offer a varying
degree of repayment plan structure. It allows the
borrower to choose their own monthly repayment.
Reducing the monthly repayment increases the term
of the loan. Level payments remain consistent
throughout the loan repayment term. In some
cases, when the income falls due to market
conditions, the borrower does not get the
advantages of the loan forgiveness scheme. This
is where IBR comes into the picture.
5. Graduated and Extended Loan terms for
Forgiveness There is a Graduated Loan repayment
program that supplements the repayment amount
after every two years. IBR again proves
beneficial when compared to Graduated payments.
You can opt for the following Repayment
Models Standard Repayment Level payment
model with monthly interest applicable for 10
years of repayment for public sector employees
and for 20 years for non-PUS employees.
Extended repayment A form of level repayment
scheme for forgiveness from student loan package
that can be extended to up to 30 years. The
amount of debt left to be repaid gets adjusted
accordingly.
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Thanks Regards
Website http//studentdebtcenter.org/ Address St
udent Debt Center 18459 Pines Boulevard, Suite
532, Pembroke Pines, FL 33029 Fax [phone]