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Get Student Loan Debt Help
19 Feb 2018

How to Get Help with Student Loan Debt

You have huge goals of owning a home and maybe even a business down the road. But your student loan debt may feel like boulders placed strategically in your path to keep you from reaching your goals. It’s time to start looking at all of your student loan debt help options.

Student loan debt is now considered a crisis in the United States, with over 44 million borrowers being crushed beneath debt totaling a whopping $1.3 trillion. The average debt amount for students in the 2016 college graduating class was more than $37,000.

So, if your financial dreams are slowly dying due to overwhelming student loan debt, you’re not alone. But don’t worry. We’ve compiled a guide for getting the student loan debt help you need.

Let’s get started.

Student Loan Debt Help: Loan Forgiveness for Public Service

This is among the most in-demand ways for obtaining loan forgiveness.

Through the PSLF program, those with public service occupations can receive forgiveness for their loans. The type of job you have isn’t necessarily important, as long as you are a public servant.

This includes working full time at a local, federal or state government agency. Any organizations with 501(c)(3) designations also qualify. Note that nonprofits that are religious-based don’t qualify.

This is how the program works: After you have made 120 payments on time, you may qualify for total loan forgiveness if you have one of the following types of loans:

  • Direct Consolidation
  • Direct PLUS
  • Direct Unsubsidized and Subsidized

If you have Family Education or Federal Perkins Loans, they are eligible only if they’re first consolidated using a Direct Consolidation Loan.

Repayment Plan That Is Income Contingent

This is another avenue for attaining the student loan debt help you so desperately need.

This plan, called the ICR plan, adjusts how much you pay each month based on your income. You’ll pay 20% of the discretionary income you earn or what you would pay on a fixed plan spanning 12 years — whichever option is less.

How exactly is discretionary income determined? It’s based on a formula that takes into consideration your income tax return information as well as the size of your family. A calculator from studentloans.gov can help you to easily figure out this amount based on your situation.

Anybody who has an eligible student loan from the federal government can qualify for this plan.

The main advantage of the income-driven ICR debt relief plan is that you can take advantage of it even if you have Parent PLUS Loans. Just be sure to go through the consolidation process with them first.

Besides Parent PLUS Loans, each of the following types of loans is eligible for the ICR plan:

  • Federal Perkins, if you consolidate
  • Parent PLUS, if you consolidate
  • FFEL for parents, if you consolidate
  • FFEL Stafford, if you consolidate
  • Direct Consolidation
  • Direct PLUS, for graduate students
  • Direct Unsubsidized and Subsidized

With this plan, if you make payments on time for 25 years, your remaining loan balance will be forgiven.

Repayment Plan That Is Income Based

For borrowers going through financial hardships, this plan — known as the IBR plan — typically offers the greatest help.

This plan caps your loan payments at between 10% and 15% of the discretionary income you earn. The 10% applies if your loan is after the first of July 2014. Meanwhile, the 15% applies for loans before this date.

Once you’ve made payments consistently for between 20 years and 25 years, any loan balance that remains can be forgiven.

Keep in mind, though, that any forgiven loans under the IBR plan may be taxed as income. So, don’t be surprised if you end up seeing a larger tax bill than you’re used to after going through this program.

These loans qualify for the IBR plan:

  • Direct Consolidation, unless you used them to repay FFEL Loans for parents or Parent PLUS Loans
  • Federal Perkins, if you consolidate
  • FFEL Plus for graduate students
  • Unsubsidized and Subsidized FFEL Stafford
  • Direct Grad PLUS
  • Direct Unsubsidized and Subsidized

You’re eligible for this student loan debt help plan if your IBR payments would be lower than your standard repayment plan’s payments over the course of 10 years. Of course, if you have a lot of debt compared with your income, meeting this requirement is easy.

Pay-as-You-Earn Plan

This plan, also known as the PAYE plan, mirrors the IBR option.

You won’t pay over 10% of the discretionary income you receive. And you can enjoy complete loan forgiveness after a couple of decades.

Note that with this plan, just like with the IBR option, the balance that ends up being forgiven might be considered taxable income.

The following loans qualify for the PAYE plan:

  • Direct Consolidation, unless you used them to repay FFEL Loans for parents or Parent PLUS Loans
  • Federal Perkins, if you consolidate
  • FFEL for graduate students, if you consolidate
  • Unsubsidized and Subsidized FFEL Stafford, if you consolidate
  • Direct Grad PLUS
  • Direct Unsubsidized and Subsidized

As with the IBR option, you are eligible if your PAYE payments would be lower than your standard repayment plan’s payments. You can take advantage of this option if you took out your loan after 2007.

Revised Pay-as-You-Earn Plan

This is a revised form of the PAYE option and became available after the 17th of December in 2015. Unlike with the PAYE option, it doesn’t matter when you took out your Direct Loan when you choose RePAYE.

This plan will cap your payments at 10% of the discretionary income you generate.

An added bonus? An interest subsidy is available to cover half of your interest if your newly created payments can’t stay caught up with your accruing interest.

If you have an eligible student loan via the federal government, you can easily qualify for the RePAYE plan.

You can use this plan if you have any of the following types of loans:

  • Direct Consolidation, unless you used them to repay FFEL Loans for parents or Parent PLUS Loans
  • Federal Perkins, if you consolidate
  • FFEL PLUS for graduate students, if you consolidate
  • FFEL Stafford, if you consolidate
  • Direct Grad PLUS
  • Direct Unsubsidized and Subsidized

Under RePAYE, you’ll enjoy loan forgiveness after two decades.

How We Can Help

We offer a wide variety of financial services, including private student loans and even helping you to consolidate your student loan debt.

Contact us to find out more about how we can help you to breathe a little easier and ultimately achieve your financial goals.