The introduction of Obama student loan program is one of the many ways the former president has sought to help people weighed down by student loan debt. The Obama student loan forgiveness act of 2016 , which people are looking for, is technically known as the Pay As You Earn (PAYE) program.
The aim of Obama federalized student loans is simple – keep student loan debt manageable and then forgive the rest of the balance if certain requirements are met. So sad that only a few people are enrolling in it. Why? People just don’t know how to ask for it.
If you were to call up your lender today and ask for the Obama Student Loan Program, they will tell you they have no clue about what you’re talking about. Bear in mind, these companies are in business to make money servicing your loan, not to explain to you all of the different options available to you. Yes, they may give some details, but in reality you’re talking to a clerk, not student loan counselor.
If you want to learn about Trump Student Loan Forgiveness programs, click here.
What you want to ask for is: Pay As You Earn (PAYE). Here’s why:
Obama Loan Forgiveness Programs Available
Since the Obama Loan Forgiveness Program affected many existing federal student loan programs, there are a couple of ways to qualify for each.
For more information on each program, click on the following links to learn more about how the individuals Obama forgiveness program can help you.
Standard Repayment Plan
If you already have federal student loans that qualify, the Standard Repayment Plan allows you to pa off your loans at a fixed rate for the span of 10 years, after which your loans will be paid off totally.
Income-Contingent Repayment (ICR) Plan
To qualify for the Income-Contingent Repayment (ICR) Plan, you’ll first need to have eligible federal student loans.
Ti’s true that the ICR plan is recommended for any person with a low income but there isn’t an income requirement tied to the plan. Through this program, your monthly payments are based on the amount you’d pay over 12 years on a fixed repayment plan or your discretionary income.
Income-Based Repayment (IBR) Plans
There are 2 IBR programs, including the original and first Income-Based Repayment (IBR) Plan and the IBR for New Borrowers Plan. Like similar plans, you’ll need to have federal student loans that qualify, and you’ll also need to sign up for the program that is designed for when your loans originated.
For the IBR Plan, these are any loans made prior to July 1, 2014. IBR for New Borrowers, on the other hand, are for loans gotten after that date (after July 1, 2014).
Another requirement needed here is partial financial hardship, which is based on your income, your family size and your state’s poverty level.
Through these programs, you can have your monthly payments capped at 10-15 percent of your discretionary income if you qualify, which is a big advantage to struggling borrowers. Your payments will then be adjusted annually, but you could earn forgiveness after 20-25 years of qualified payments.
For more details on Obama Loan Forgiveness, speak with student loan specialist by phone at HERE.
Pay As You Earn (PAYE) Plans
The PAYE Program offers people with qualifying federal student loans under financial hardship the ability to repay student loans acquired before October 1, 2007 – as well as consolidated or disbursed loans made on or after October 1, 2011 – at 10 percent of discretionary income.
The REPAYE Program is like the PAYE Program, but comes with all qualifying federal student loans, no matter their origination date. Similar to the PAYE Program, monthly payments through the REPAYE Program are capped at 10 percent of your discretionary income.
Both programs offer forgiveness after 20 years of qualifying payments, unless you have earned a professional or graduate degree, in which case you will need to make 25 years of consistent payments in order to qualify.
Graduated Repayment Plans
If you’re interested in cutting down your monthly payments for a short period of time, the Graduated Repayment Plan, the Extended Fixed Repayment Plan and the Extended Graduated Repayment Plan might prove helpful.
With qualifying federal loans, the Graduated Repayment Plan will reduce your payments for the first two years upon approval. During this time, you’ll only be making payments towards your loan’s interest.
Once the 2 years have ended, more of your payments will go towards a loan’s principal, and your repayment period will be based on your balance.
If your student debt is more than $30,000, the Extended Fixed Repayment Program may help, as long as you have loans that qualify and don’t have any outstanding balances prior to October 7, 1998. For the first two years under this program, all your payments will be made towards your loan’s interest at a fixed payment amount. After 2 years, you’ll then begin paying towards your principal, and you’ll have up to 25 years to repay your loan.
Bearing lots of resemblance to the Graduated Repayment Plan, the Extended Graduated Repayment Plan gives you up to 25 years to repay student loans, while keeping your monthly payments minimal for the first 2 years.
These plans are great for anyone whose income is lower and is expecting to make more money in the nearest future, or those who want to have more of their income to spend for the initial two years of each program.
Find out if you can take advantage of Obama Loan Forgiveness Form for free.
Teacher Loan Forgiveness
Obama student loan forgiveness for teachers is comes in diverse ways, if you’re a qualified teacher who has one of several required federal student loans, and you’re working in a school that also meets the requirements for this type of plan.
Aside enjoying a Perkins Loan Cancellation, which could terminate any existing debt on your Perkins Loan, there are several other programs you may be eligible for.
As part of the Obama federalized student loans initiative, these programs offer teachers a means to continue in the profession they love, while still having the ability to make reasonable monthly payments. Plus, you may have an opportunity to have your debt eliminated completely if you meet a program’s qualifications.
Public Service Loan Forgiveness (PSLF) Program
People call this – Obama student loan forgiveness public service for a reason.
If your career has you serving the public in a public service position, non-profit organization or similar agency, you may benefit from the Public Service Loan Forgiveness (PSLF) Program.
As a borrower of qualifying federal student loans, as well as working for a qualifying employer, you may be able to have your debt completely forgotten after making 120 consistent, on-time payments. This means that within a time frame of 10 years of making student loan payments, youcould have the remainder of your debt forgotten completely – and you won’t have to claim it on your taxes, either.
Total and Permanent Disability (TPD) Discharge
Obama student debt forgiveness also features the Total and Permanent Disability (TPD) Discharge, which is an incredible program for borrowers who have a permanent injury or disability that prevents them from repaying student loans.
If you are unemployable and can have your total and permanent disability verified your physician or by the U.S. Department of Veteran Affairs, you could qualify for this program. These include physical and/or mental impairments that have persisted for 60 months or more, are expected to continue for that length of time, or may ultimately result in death.
By getting approved for a TPD Discharge, you could have your debt erased in a matter of seconds, without the accompanying repayment period of other types of forgiveness programs.
For more details on Obama Loan Forgiveness, speak with student loan specialist by phone at YOUR NUMBER HERE.
Where’s The Student Loan Forgiveness?
In case, you’ve been reading this article and about to fill the Obama Student Loan Forgiveness form but still asking “what’s in it for you”… Read on
Once you make payments under the PAYE program for 20 years, any remaining balance you have on the loan will be forgiven **poof** – it’s as simple as that!. That’s the biggest benefit for borrowers. Not only do you get reasonable payments, but you also can have the remaining balance forgiven if you make all your payments in the program.
Easy, isn’t it?
But, it’s important to note that under Obama’s Student Loan Forgiveness Plan, you will owe taxes on any loan balance forgiven. This is what makes it different from traditional student loan forgiveness plans.
For example, if you have $100,000 in student loan debt forgiven under the plan, you could owe around $22,000 in Federal income tax. That could be tough to pay, but for majority of people, it’s easier to pay this smaller amount than the original student loan balance. Plus, you can setup payment plans from the IRS as well, which could ease the burden.
Is Obama Student Loan Forgiveness Right For Me?
It’s hard to determine if this Obama federalized student loan is perfect for you or not.
Now, if you can make your payments with ease under the Standard Repayment Plan, you should keep to that. But, if you’re finding it hard to make payments, specifically due to the amount of your student loan (under any standard repayment method), Obama’s PAYE plan or IBR (Income Based Repayment) may make the most sense for you.
I recommend using Credible, a marketplace for student loan refinancing where you can receive offers from various lenders by completing a single form to understand your options. You can get more than 10 offers in less than 2 minutes with NO credit check. Plus, our readers can get up to a $750 bonus when they refinance with Credible.
But, realize that with both IBR and PAYE, you will owe taxes on any student loan amounts forgiven.
If you’re not pretty sure where to begin from or what to do, you might check out a service like LoanBuddy. LoanBuddy is a tool that analyzes your student loans, and helps you determine the best repayment plan and loan forgiveness programs like the Obama student loan forgiveness Plan you’re eligible for.
So, Have you looked into IBR or PAYE for your student loans? One or many Obama federalized student loans might fit your needs!