In the year 2019, student loan debt has hit a high of $1.5 trillion so far. Statistics from September of 2018 show that the average amount of student debt carried by borrowers is $33,310 - that’s across 42.9 million individual students! That’s a lot of debt, no doubt.
If you are one of those 42.9 million students struggling with student debt, you may be asking yourself what you can do to settle what you owe quickly. While your debt may seem overwhelming, there are student loan debt relief options. Let’s take a look below at some of them.
This type of student loan debt relief will cap your monthly payment amounts at no more than 10% of your discretionary income; be aware that your income amount will include your spouses if applicable. Once you’ve hit 20 years of payments, your remaining loan can be forgiven if you’re an undergraduate; 25 years if you are a graduate. In regards to the interest accruing on this loan, if your payment plan doesn’t cover the interest the government will step in and help pay up to 3 years worth.
If you borrowed prior to July 1, 2014, you’ll only have to pay 10% of your discretionary income. For borrowers that took out loans after July 1, 2014, the percentage will be 15%. For those 2014 borrowers the loan will be forgiven after 20 years, and 25 years for after 2014 borrowers. Both plans are extremely helpful for making your debt affordable, IBR is just slightly more helpful if you borrowed prior to the above-mentioned date. In regards to the interest accruing on this loan, if your payment plan doesn’t cover the interest the government will step in and help pay up to 3 years worth.
PAYE is a more basic and straightforward version of IBR and REPAYE with fewer stipulations. Essentially, if you qualify for this plan you will not have to pay more than 10% than your discretionary income for each payment and the loan can be forgiven after 20 years. In regards to the interest accruing on this loan, if your payment plan doesn’t cover the interest the government will step in and help pay up to 3 years worth.
Compared to the other loan forgiveness options currently out there, like PAYE and REPAYE, ICR isn’t as good of a choice. With ICR, your monthly payments would equal to 20% of your discretionary income and would be forgiven after 25 years. In regards to the interest accruing on this loan, if your payment plan doesn’t cover the interest the government will step in and help pay up to 3 years worth.
Career Path Loan Forgiveness
This type of student loan debt relief is for those who chose a career and have worked for a certain amount of time in an area that serves the community. Some of these careers include teaching, military, medicine, and more. There are a number of different programs available to those that qualify in this are. Some examples are:
- Veterinary Medicine Loan Repayment Program
- Perkins Loan Cancellation
- SEMA Loan Forgiveness
- Navy Financial Assistance Program
- Teacher Loan Forgiveness
Cancellation of Loan
If you’ve experienced one of the following situations, you may qualify and apply for a cancellation of the total of your student loan:
- School closures
While the cancellation of the loan is not guaranteed, it is worth checking into with your creditor.
Deferment of your loan essentially places your repayments on pause until you are able to resume repaying the loan. Usually, your interest will not continue to accrue during this period. This is a temporary solution, but it may be worth checking into if you need a moment to focus on your other finances or getting into a better financial situation.