What Advantages Can You Get from Student Loan Forgiveness?
You may not know that there is such a thing as student loan forgiveness. Because of the advantages it gives to borrowers, many schools to today are getting this new program. So the borrower will really get advantages from this student loan forgiveness program. 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. Below are some of the repayment plans students can pick from and their advantages.
The standard repayment is the first repayment plan. Each month, the borrower is allowed to pay the same amount in this repayment plan. There is no increase or decrease in the monthly payments until the loan is completely repaid. The amount borrowed, the interest rate, and the terms of the loan will determine the fixed monthly repayment amount. The benefit of this repayment plan is that you can save ahead for your monthly payments because the amount is already determined. This is because the amount of payment is the same until the loan is paid back.
The graduated repayment plan is another repayment plan for student loans. The graduated repayment has to do with paying a lower rate in the first years of the loan, and then having an increase in the payment as the school years go on. There will be increases in monthly payments every two years. For those who cannot give a big repayment at the start, this is very beneficial. If the student has a low budget at the start, then he or she does not need to worry about paying a lot when he or she starts the student loan forgiveness. The student can save money while the years go on.
The pay as you earn plan is the third repayment plan. This plan has the lowest monthly payments. This is true because you only pay the loan 10% of your monthly income. This pay as you earn plan can be difficult to qualify for because of their qualifications and specifications that you need to undergo. This is beneficial because if you are able to pass all the qualifications and specifications to be able to do the pay as you earn plan. In this repayment plan, you will have very low monthly payments. 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.