Criteria used to determine eligibility for income based repayment plans

IBR-FinAidIncome based repayment plans make it easier for people servicing high student loans and struggling financially. Through these plans, the monthly payment amount is reduced substantially, depending on the extent of the financial strain and other factors like family. However, not all people qualify for this plan. There are certain factors considered by the government when granting this aid to various beneficiaries of the student loans.

Qualifying for income based repayment plans

To qualify for the IBR plans, there are certain factors that you must meet. They include:

• Type of loan

The only loans eligible for the IBR plans are: GRAD PLUS, Stafford loans, consolidation loans made under federal family education loan plans or direct loan. All non-federal loans, Parent PLUS loans and loans which are currently in default do not qualify for the program, and have to follow the standard repayment plans.

• Evidence of financial strain

Qualifying for income based repayment plans primarily requires that there be financial strain in your life. The essence of the loans is to ease the burden for borrowers who make good on their promise to pay. To determine whether or not you are indeed facing financial strain under your current salary, the government uses an IBR calculator. This calculator factors in things like family, the current monthly payment made under the standard repayment plans, state of residence and the current salary.

If the IBR calculator shows that the amount you should be paying is lesser than the amount you currently pay on your standard repayment plan, then you automatically qualify for the loan. To answer a question many people frequently wonder about, the amount you currently pay under the standard plan will not be increased if the IBR calculator determines that you should pay more.

• Responsibility

You also have to show commitment to qualify for the income based repayment plans. As such, you must have been consistent in making your standard loan repayments.

Income based repayment plans for married people

For couples, qualifying for income based repayment plans will see certain aspects of the criteria change. For starters, if you both file for a joint federal tax return, then your spouse’s salary will also be considered in the IBR calculator.

If further your spouse also has a student loan eligible for the income based repayment plans, his/her loan is combined with your when making the calculations in the IBR calculator. This however will also require that you both file a joint federal tax return.

Crucial factors to note about IBR plans

Qualifying for income based repayment plans may take a huge burden off your shoulders for the moment; it may also work against you in the long run. This is because the lower repayments extend the life of the period within which the loan should be paid. This gathers more interest as compared to before, seeing you pay more in the long run.

People with huge debts also have a chance to rid themselves of the obligation. This will however require them to have serviced the loan for 25 years or longer and to also have made 300 or more eligible repayments.

Five Student Loan Forgiveness Programs

student loanFor the students who have been benefiting from the students loans, they have to bear in mind that such loans have to be paid back. Such loans have to be repaid after the graduation or about six months after the beneficiary have withdrawn from the school. The loans have varying repayment options and such options include deferring when the borrower is underemployed or unemployed. However, there are the Student Loan Forgiveness Programs that allows the student to have part of his/her loan or the entire loan forgiven under some given circumstances. Here are some of the circumstances you should know that gives you a chance of Utilizing Student Loan Forgiveness Programs:

  1. Doing A Volunteer Work

A student can be given a chance to do some volunteer work after school. He/she will agree with the student financing body on the rates or how much loan should be forgiven. There are some institutions of federal governments that allow students to work in some charitable organizations and have part of their loans forgiven. Some federal government will give some students a chance to be employed and instead of receiving the payments, their money will be used to repay the loan. This means that they are employed only to have their loans repaid. Therefore one can volunteer in some government organizations and have part of the loan repaid.

  1. Join Military Service 

The students who have benefited from the loan have the opportunity to join the Army National Guard and have part of their loan forgiven. The educational loan repaid will depend on the length of the military service.

  1. Become A Teacher And Assist Low Income Students

The borrowers can become teachers and teach the low income students in some schools. This way, they will be eligible to student loan forgiveness. In most cases, they will have their loans forgiven at the rate of 15% for the first two years. The rate of loan forgiveness will increase to about 20% in the third and the fourth year. The rate of loan forgiveness will increase as the number of teaching years increases.

  1. Medical And Legal Students Working In Public Interest Positions 

There are some cases where the medical students who benefited from the loan work after graduating in places with limited access to medical services. Such students are likely to benefit from the loan forgiveness program. Moreover, some legal students may decide to work in the non-profit or in the public interest law positions. They will also benefit from the student loan forgiveness program.

  1. Law Enforcement

There are some fields of study in some countries where the students who have graduated must benefit from the loan forgiveness plan. There are some instances where some students are given educational grants and other financial benefits. In case such students had benefited from the students loans, they will have part of the loan forgiven. Moreover, there are some cases where the students were from a very poor family and the law demands that such students must have part of their loans forgiven. Under such circumstances, part or all loans will be forgiven.

How to Select the Best Adviser to Guide You in Understanding Pay As You Earn Repayment Programs

In order to understand well about the Pay as You Earn Repayment Program, you have to make use of a financial adviser. This means that you have to take your time to look for the best adviser. It is not just rushing to anybody as you adviser but you should have some of the useful tips that can guide you. Most of the people who want to repay their loans find it challenging to select the best adviser to guide them. Most people who have difficulty in repaying their loans did not select the best advisers. Here are some of the tips you can employ so as to choose the best adviser to guide you in understanding Pay as You Earn Repayment Programs:

  1. Consider The Experience Of The Pay As You Earn Repayment Program Adviser

You have to consider those advisers who have been in the field for a longer period of time. They are capable of giving you the best advises. This is due to the fact that they have handled many problems including the sophisticated financial problems. Such people are in a position to give you the best advises and even guide you on what to do in different situations. You just have to consider the advisers who have been in the field for a reasonable period of time.

  1. Read What Other People Have To Say About Their Services 

Such comments of other people will be accessed on their websites or the pages in the social media. The people who have been advised on the Pay as You Earn Repayment Programs by such advisers will be able to post their comments regarding the quality of the services they enjoyed. It is recommended that you go through all the comments in all the websites and the pages in the social media. After you have exhausted the websites, you are to choose the one with more positive comments and reviews. This way, you will get the best adviser to guide you on your program.

  1. Consider The Licensed Advisers To Do The Job

Such advisers are the best since they have the license to operate. In order to be given the license, they are thoroughly checked by the quality assurance bodies so as to ensure that their prices and the quality of their services are within the required range. Besides, their prices are controlled by the licensing body from time to time. They are not like other advisers without a license who will offer vague services to their customers at higher price range. It is therefore advisable that you consider the license possessed by the advisers before choosing one.

  1. Compare Several Financial Advisers Before Choosing One To Guide You

This can be performed effectively by visiting their websites and going through the nature of the services they offer. It is normally advisable that all the websites are exhausted before making any decision. Finally, you are required to choose the one with the quality of the services you need and at the price range you can afford. You should not concentrate on the price such that the quality of the services is compromised.