For many young people, attending college is a dream come true. However, the reality of student loan debt can quickly overshadow that dream. Graduating with massive levels of student loan debt can make it difficult to make ends meet, let alone save for the future. Thankfully, there are programs available to help those with student loan debt.
Income-Driven Repayment Plans
Income-Driven Repayment Plans (IDRs) help borrowers who have difficulty making their loan payments on their federal student loans. These plans take into account one’s income, family size, and state of residence to calculate a monthly payment amount. IDR applicants must reapply each year, and after 20-25 years of consistent payments, any remaining loan balance is forgiven.
The Public Service Loan Forgiveness Program
Individuals whose careers fall under the public service category, like those in government or non-profit sectors, may be eligible for the Public Service Loan Forgiveness (PSLF) Program. Individuals who have made 120 qualifying payments under the IDR can be eligible for full loan forgiveness.
Loan Consolidation
Consolidating student loans, whether federal or private, can help individuals who have multiple loans with varying interest rates. Loan consolidation combines all loans into one payment with a fixed interest rate, simplifying the loan repayment process.
Loan Rehabilitation
Loan Rehabilitation can help individuals with defaulted student loans bring their payments up to date and improve their credit score. Once the loan is rehabilitated, the borrower can begin income-driven repayment plans to avoid default in the future.
Tax Deductions and Credits
The American government offers student loan tax credits to borrowers who pay back their loans. The Student Loan Interest Deduction allows individuals earning below a certain income level to deduct up to $2,500 annually from taxes owed. When combined with other tax deductions, this can make a major difference on the amount of taxes owed each year.
Conclusion
Student loan debt can be an overwhelming burden. However, these student loan debt relief programs can make it easier to manage that debt and move forward. Putting in the work to research and apply for these programs can lead to a brighter financial future. Immerse yourself in the subject with this external content we suggest. settle debt.
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