THE FEDERAL STUDENT LOAN FORGIVENESS PROGRAMS FOR RECENT BORROWERS
While there is a number of student loan forgiveness programs offered by the federal government, the recent program has gained popularity among the borrowers. This program commonly called the Obama Loan Forgiveness Program via the PAYE option is the best fit for the recent borrowers. The borrowers who took the program after the period of October 1st, 2007 can get the benefits of the program which is stated as the Obama Student Loan Forgiveness Program.
This program was actually announced by President Obama in the period of 2007 which also came up with several changes regarding the Federal forgiveness programs apart from the introduction of new programs. This program is much more lenient in terms of the student loan repayment plan and is called as Pay As You Earn. Many people refer to this as the Obama Loan forgiveness due to the reforms put under this during the tenure of the then President.
There is the Know before you owe initiative which makes sure that the graduates are not put up with high monthly payments which will increase their stress. President Obama ensured to offer much more flexible repayment plans which will work in the way of putting a maximum cap on the monthly payments depending on the monthly income of the borrower. In this case, there is the cap of 10% of discretionary income which will be able to save thousands of dollars for the student borrowers.
There is the Pay as you earn student loan repayment plan which is based on the monthly payments where there is a cap of 10 percent. This is basically part of the Income-based federal student loan repayment plans. In this plan, the borrower will be able to get complete forgiveness at the end of 20 years worth of payments. No matter how much remaining the debt is, it will still be forgiven. In the case of the Public Service Loan Forgiveness Program, there was the initial necessity to make at least 20 years worth of payments. But after the President has made in new changes, there happens to be a requirement of just 10 worth of payments after which the student debt will be forgiven.
In the above-mentioned program the student will have to work for one of the jobs which are listed under the Public service loan forgiveness program in order to achieve its benefits. While the popularity of these programs are increasing the Pay as you earn repayment plan still holds true only to the people who have got the loan after October 1st, 2007. Then there was the updated plan which came in the name of REPAYE student loan repayment plan which offers similar benefits like the Pay as you earn program without the time limit constraint.
Under the REPAYE program, this was made available to basically everyone who has got a federal student loan. This program requires a regular monthly repayment to be made for the availed loan which will be based on the annual income of the borrower.