What Advantages Can You Get from Student Loan Forgiveness?
Student loan forgiveness is something that is possible today. It is a new program that more and more schools are starting to get because of the many, many benefits that it gives to the borrower. There are benefits to this program for those who apply for student loans. With the student loan forgiveness it is possible to consolidate all your federal student loans into one new loan. This will enable the borrower to choose an easy repayment plan. There are many repayment plans that students can pick from; however, here are only 3 repayment plans and their benefits.
The first repayment plan is the standard repayment. This is when the borrower gets to pay the same amount each month. In this type of repayment you can’t increase or decrease your payments but stays as is until the loan is paid off. The amount borrowed, the interest rate, and the terms of the loan will determine the fixed monthly repayment amount. The standard payment is beneficial as you can know how much money you have to save to be able to pay the loan every month, and not just try to guess the payment. This is true because of the fixed amount of repayment for the standard repayment plan.
Another type of repayment plan for student loans is the graduated repayment plan. The repayment plan is graduated meaning that at the start the payment is a lower rate but when the schools years go on, it gradually increases. The payments will start to increase in about every two years. This is really beneficial especially for the students that cannot pay a big amount right away. If a student has a low budget at the start of the repayment then there is nothing to worry about when she starts the student loan forgiveness. As the years go on, the student can save money and increase the repayment amounts.
And finally, the third repayment plan here is the pay as you earn. The advantage of pay as you earn plan is that it has the lowest monthly payments. In this plan you only give ten percent of your monthly income as your payment. But, this repayment plan is not for everybody because to be eligible for this repayment plan you have to pass certain qualifications and specifications that you have to undergo. The pay as you earn plan is for you if you pass the qualifications and specifications. The monthly payment will be really, really cheap. In the student loan forgiveness program, pay as you earn actually has the lowest monthly repayment amounts but it also has the highest qualifications and specifications for eligibility.
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