If you’re not one of the millions of people in America dealing with crippling student loan debt, this article is not for you. If student loan debt is overwhelming and feels like it’s ruining your life, keep reading.

The US Department of Education just announced (fall 2015) a new program that starts in December 2015 that allows borrowers to pay a set amount of their adjusted gross income rather than a pre-determined fixed amount. This can be good news if you’re struggling to keep up with your student loan payments or they take up a large amount of your income. (At this time of writing I haven’t seen a specific date on when the program launches.)

Lucky for you, I’m a nerd and I’ve read through all the boring and incomprehensible jargon. Here are the highlights.

The amount you pay is determined on how much you make after taxes (line 37 on your 1040 tax return).
In the new program, you pay 15% of your income if you’ve had your loans since before July 1, 2014. If you got your loans after July 1, 2014, the amount is 10%. If you’re married, the percentage is the total amount of your joint income if you file together. That’s excellent news.

Even if you don’t finish paying them off in the time frame designated for each payment plan, the loans are forgiven. Gone. The only caveat is that you might have to pay income tax on the balance. This is a tricky wicket, but worth checking out if you’re buried.

There is even a handy loan repayment calculator that will populate your actual loans and calculate the amounts based on your income so you can make educated decisions. It shows all the different repayment programs

If you are really struggling, don’t forget that forbearance and deferment are your friends. The worst thing you can do is ignore your loans. When they go into default, it can mean wage and tax return seizure and/or garnishment.

Federal student loans don’t ever go away. They are nearly impossible to get rid of, even if you declare bankruptcy.

Here’s the website for all the details and a helpful PDF overview and a FAQ.

If you’ve got late payments and derogatory remarks on your credit from your student loans, public or private, we can help. Get in touch here and we will give you a free consultation on where we think we can get your score.

Cassie

If you’re not one of the millions of people in America dealing with crippling student loan debt, this article is not for you. If student loan debt is overwhelming and feels like it’s ruining your life, keep reading.

The US Department of Education just announced (fall 2015) a new program that starts in December 2015 that allows borrowers to pay a set amount of their adjusted gross income rather than a pre-determined fixed amount. This can be good news if you’re struggling to keep up with your student loan payments or they take up a large amount of your income. (At this time of writing I haven’t seen a specific date on when the program launches.)

Lucky for you, I’m a nerd and I’ve read through all the boring and incomprehensible jargon. Here are the highlights.

The amount you pay is determined on how much you make after taxes (line 37 on your 1040 tax return).
In the new program, you pay 15% of your income if you’ve had your loans since before July 1, 2014. If you got your loans after July 1, 2014, the amount is 10%. If you’re married, the percentage is the total amount of your joint income if you file together. That’s excellent news.

Even if you don’t finish paying them off in the time frame designated for each payment plan, the loans are forgiven. Gone. The only caveat is that you might have to pay income tax on the balance. This is a tricky wicket, but worth checking out if you’re buried.

There is even a handy loan repayment calculator that will populate your actual loans and calculate the amounts based on your income so you can make educated decisions. It shows all the different repayment programs

If you are really struggling, don’t forget that forbearance and deferment are your friends. The worst thing you can do is ignore your loans. When they go into default, it can mean wage and tax return seizure and/or garnishment.

Federal student loans don’t ever go away. They are nearly impossible to get rid of, even if you declare bankruptcy.

Here’s the website for all the details and a helpful PDF overview and a FAQ.

If you’ve got late payments and derogatory remarks on your credit from your student loans, public or private, we can help. Get in touch here and we will give you a free consultation on where we think we can get your score.

Cassie

The Best Student Loan Repayment Plans When You Have A Lot of Debt

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