| A new federal program starting in the fall offers | | | | program. Private lenders will not offer this program to |
| hope and relief to millions of students and graduates | | | | you. You will need to keep records of your |
| that have major educational debts, in other words, | | | | payments and the like so that at the end of the 10 |
| you will be able to get student loan help. As of July 1, | | | | year period, you can apply for the forgiveness |
| if you have federal loans, you can ask the | | | | portion of the loan program. You are going to have |
| government to place limit your payment amount to | | | | to provide proof that you followed all the rules in |
| 15% of your income. This is a new income based | | | | order for your loan to be forgiven. |
| program that is being offered to those with debt. | | | | There are some downsides to the program though. |
| If your income is less than one and half time the | | | | For instance, if you qualify but your payments don't |
| poverty level you will not have to pay anything on | | | | cover the interest portion of your loan, your debt will |
| your student loans. For others who qualify for the | | | | continue to increase until you reach the forgiveness |
| program, their payment will be 15% of the difference | | | | period. There is a chance that you will have to pay |
| between the budget allowance and their income. | | | | taxes on the forgiven amount if you are not in a |
| If you are in a public service job, after 10 years of | | | | public service job. Also, if you have defaulted on your |
| paying on your loans through the income based | | | | loans, the program will not lower your payments. If |
| program, the rest of your debt will be erased. For | | | | you have gone into default, you will not qualify for |
| those who are not in public service jobs but stay | | | | the program at all. |
| current on the income base payments for 25 years | | | | There are several types of loans that the program |
| will have their debt forgiven as well. | | | | does not cover. These loans include private, |
| In order to take advantage of the program, limit the | | | | alternative or signature loans. Parent loans are not |
| amount of money you borrow to federal student | | | | covered either. |
| loans. As with any loan, make sure to research the | | | | Finally, if your income is high enough that your loans |
| loans offered. If you are no longer in school, contact | | | | are less than 15% of your income, regardless of |
| your lender to apply for the income based program. | | | | what other debt you may have, you won't qualify |
| Make sure to apply for the correct program and not | | | | either. If you think that all this fine print will disqualify |
| one that sounds the same. Some of the similar | | | | you, don't worry. There are several groups who are |
| sounding programs are referred to as Income | | | | lobbying at this time to have improvements made to |
| contingent repayment or income sensitive repayment. | | | | the program. Congress is already looking at making |
| If you are in a public service job, make sure to | | | | changes. |
| consolidate your loans and then apply for the | | | | |