5 Reasons why Obama Student Loan forgiveness is a Big Hit

1. 5 Reasons Why Obama Student Loan forgiveness is a Big Hit

2. 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 Obama’s 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.

3. 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.

4. 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.

5. Thanks & Regards Website: http://studentdebtcenter.org/ Address: Student Debt Center 18459 Pines Boulevard, Suite 532, Pembroke Pines, FL 33029 Fax: (813) 579-2032