Things Every Student Must Know About Student Loans
For students who are in the verge of graduating, May is a very important month. You need to think of your student loans aside from thinking your final exams and looking forward to your dream job. You’ll need to cover the costs of your student loans after you graduate as payments will begin to kick in. It will be much easier if you only have one student loan, but if you have multiple student loans, then that will be harder. It can be confusing dealing with various agencies and you might not be fully aware of the amount you owe and when you need to process a payment. Now, repayments can be simplified with a small dose of organization, and all you have to do is to obtain the necessary information so you can write it down or just create a direct debit account so the payment will just be taken out.
One way to reduce your loan is by availing of Federal Direct Loan Program or Obama Student Loan Forgiveness. It is a program of the government to help students repay their student loans in a smoother and easier terms that apply to all federal student loans but not to private loans. With this program, a borrower receives a lot of benefits, such as consolidation of multiple federal loans into one new loan, and the borrower is given repayment plan options that are more affordable and flexible. The different types of repayment plans include standard repayment, graduated repayment, income contingent, income based, and pay as you earn. For standard repayment, a fixed amount is paid by the borrower for the entire life of the loan, basing on the interest rate, term of the loan and borrowed amount. Graduated repayment allows a borrower to pay lower than standard repayment plan, but the amount increases gradually every two years. The borrower makes payment basing on his income in an income contingent plan, as well as basing from the interest rate, loan balance, and family size. A borrower can make payment basing n the income and family size or fifteen percent of their discretionary income for income-based repayments. PAYE or Pay as You Earn repayment has the lowest monthly payment among the rest of the repayment plans that depends on the borrower’s income or ten percent of the discretionary income.
It is important finding out the grace period of your student loans. It is typically six months but it can reach up to nine months depending on the type of loan. This would give you enough time to find and earn money to make a payment. Indeed, you don’t have to stick to standard or traditional repayment methods because there are a lot of options out there, feel free to check our website for more information.