Understanding Public Service Loan Forgiveness
Many of the people are quite curious to know complete detail of the public service loan forgiveness program. The big rewards for student loan holders in the form of forgiving thousands of dollars in debt are the reason why loads of people are looking for it.
However, before applying for the same it is essential to know the required preparations for the same. The value of loan forgiveness is limited only by the amount of eligible loans that you have collected so far. No doubt, one has to make payments for ten years as part of the deal, as a result all the balances could be significantly lower by then.
The Public Service Loan Forgiveness Program is a federal program specially designed to forgive student loan debt for employees of certain public and nonprofit jobs. This program applies to student loan debt holders in specific domains of work with some special loans and who make qualifying payments.
However before you make it a final call to opt for this program be sure to consider how much in student loans you are left to be forgiven after ten years of repayment.
This program is the most priceless if you have high loan balances comparative to your salary. If your loan balances are low, then it’s improbable that you’ll have much of your loans outstanding to be forgiven after ten years of payments.
In order to qualify, you are required to meet the two basic criteria. The first is that you need to get enrolled in a qualifying repayment plan and the second one is that you must have made 120 monthly repayments.
Following are the payment plans that qualify:
a. Pay As You Earn (PAYE)
b. Income-Based Repayment (IBR
c. Income-Contingent Repayment (ICR)
d. Standard repayment
e. Any other payment plan with monthly payments that is equivalent to or exceeds the average repayment monthly payments
Irrespective of the plan you opt for, you will be required to make 120 monthly payments on time and in full to qualify. Further adding, only payments made after October 2007 counts as qualifying payments.
For many debt holders, REPAYE, PAYE, IRB, and ICR possibly make the most logic for increasing the amount forgiven at the end of the 120-month period. These plans are mainly feasible as they normally lower monthly payments, which mean that you will have a larger balance remaining at the end of the period. In addition, the standard payment plan is intended to pay off the student loans in ten years, so if one stays in this plan, there will be nothing left to forgive after ten years of payments.
To know and get a complete assistance about these programs you can also hire a Public Service Loan Forgiveness Consultant. The expert professionals will give you the right assistance.