4. Right to pay based on what you earn. There are a few programs that can help with loan payments if you can't afford the loans you have. The "pay as you earn" plan puts the monthly payment at 10% of your discretionary income based on your income and family size. The "income-based repayment plan" is based on 15% of discretionary income.
The "income-contingent repayment" plan is based on 20% of monthly discretionary income and is meant for low income borrowers who don't qualify for the other plans. Under the plans, if the balance isn't paid off by the end of the loan terms (20 to 25 years), then the remainder is forgiven.
5. Right to consolidate loans. If you have several federal student loans, you can consolidate them into a single monthly payment, making bill paying easier.
6. Right to loan forgiveness. If you work in law enforcement, early childhood education, public health, emergency management, the military, school-based services or such government jobs, you may be eligible to have your student loan balance forgiven if you've made 120 payments under the Public Service Loan Forgiveness Program.
Teachers in low-income communities can have up to $17,500 in loans forgiven under the Teacher Loan Forgiveness Program.
7. Right to change payment schedule. The standard loan payment schedule is for 10 years. An extended repayment plan can increase it to 25 years, which will decrease the monthly payment but increase the interest paid on the loan. For the grad with an increasing income, payments can be graduated and start low with increases every two years.
8. Right to deduct interest. By following IRS rules, federal student loan interest payments can be deducted from taxable income.
9. Right to repay early. This may sound like a no-brainer, but it's a right that borrowers don't always have. Student loans can be repaid early with no penalty.
Federal student loan delinquency rates rose 27% from 2007 to 2012, according to TransUnion, while private loan delinquency rates dropped 2% during the same time. The potential worry, a TransUnion official says, is that such high delinquency rates for student loans could spill over into mortgages and other debt.
Student loan borrowers who know their rights, hopefully, won't fall into such holes.
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College expenses definitely do not have to be as high as they are. My oldest is a sophomore and I have a senior in high school visiting campuses now. During this difficult economic time, college campuses seem to be oblivious to this. They are putting up new buildings, enhancing business centers and any number of other things while tuition/room and board continues to increase every year. I fully realize that attracting new students is a competitive thing, but the lengths that they are going to is unreal. Last fall while visiting, one campus was actually painting their grass green to make the place a bit more attractive. I guess they have us though - an education is still preferable for most people and we'll pay the cost.
Hey ... here's a thought .... don't borrow party money! I wish I could list all the children taking classes at the same time I was .... borrowing the maximum they could borrow .... buying pizza and beer with Student Loan money. Didn't work, didn't see a need to I guess. I worked. I worked full time while going to school full time. I worked two jobs all summer long. After 8 years of school (4 full time, 4 part time), I managed to graduate with two baccalaureate level degrees, on in science and one in social science ... with a total of $15k in student loan debt. I just returned to classes to get my graduate degree in environmental education. I will be working full time while I do so.
"OH" ... but they cry aloud ..." if we have to work we won't have time to study!" Really? because I work full time and still make time in the day to study and work out at the gym. Grow up! Do you think your Boss will care if you don't feel like working tonight?
Thats funny.. My Ferderal Loans Interest Rate is 6%. That is higer than a private loan that I pulled-out while I was in school. Trust me.. If the Gov. pulled-out of offering loans, the school woudlnt be hiking there rates. When will the Gov. learn to stay away..
Never Borrow Money
3. Right to defer payment. "... Interest will still accrue during the time off from the loan."
I would recommend you do everything possible to avoid deferring payment because interest just accrues. $10,000 at a rate of 3% means $300 is owed, that is a generous number. For my loans, I see them fluctuating between 2.3% and 6.8%. Now, $40,000 compounded at 5% is around $2,000 each compounding.
Hopefully this article is written to actually help people and not persuade them that student loans are okay.
If you have no income, how can you pay based on what you earn?
Consolidation really is a dirty, little trick. Yes, interest rates may be locked, but all your loans are stuck with whoever you consolidate. Not only that, but you lose your grace period.
Graduated repayment plans actually start you out with paying mostly or nearly all interest. Who in their right mind would choose to simply pay interest for years?
As for repaying early, that really doesn't help. Who can really afford to do that without having so much taxes, that is, assuming you actually have income?
I would hope that the government would be wise enough to keep interest rates very low since there is a tax deduction for it. Otherwise, even our government would be subject to having to pay for crooked interest rates. (One would think they would be smart enough to avoid that.)
All of these rights really are meaningless or useless.
I had to sign for my daughter, I was told once she gets her credit built they would put it in her name.
That was a lie and now i am stuck. I even went to the President Obama, nothing in return.
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