Student Loans Suck But These Options Can Help !

loans

Student loan debt has been a major topic of discussion lately. Particularly since it recently surpassed consumer debt at a whopping $1.2 trillion. Now what in the world is scarier than getting mail that says that your loan will be entering repayment? The answer?: LITERALLY NOTHING.

So here are some options for those of you (like myself) who are about to start paying back their student loans.

*NOTE: These options are specifically for government student loans.*

Income Based Repayment Plan (IBR):

This is the most common repayment plan those with student loans utilize. If you have a loan before July 1, 2014 then your payment will not be more than 15% of your discretionary income, and your loan will be forgiven after 25 years of payments.

If you have loans after July 1, 2014 then your monthly payment won’t be more than 10% of your discretionary income, and your loan will be forgiven after 20 years of payments.

I know what you’re thinking (massive eye-roll, sarcastically drags out “thanks”) but 25/20 years is better than nothing.

Pay As You Earn (PAYE)

With this plan you won’t pay more than 10% of your discretionary income and your loan is forgiven after 20 years.

The key difference between this plan and IBR is that PAYE applies to loans that date back to 2007.

Income Contingent Repayment Plan (ICR)

So this repayment plan is different from both IBR and PAYE. Under this plan there is no initial income requirement. However, you must submit your income every year and if your income rises then your monthly payments will adjust accordingly.

With the ICR plan your loans will be forgiven at the end of 25 years.

Look guys, the only way to handle your loans is to treat it as the enemy. Learn everything you can about them, strategize, and then defeat them. You can learn more about your options by visiting the Federal Student Aid site (plus they have a nifty Repayment Estimator).

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