Qualifying for student loan debt relief can be a huge help for those carrying high amounts of debt. Here are a few way to start the process.
How to Get Student Loan Debt Relief
Option One- Public Service Loan Forgiveness
One way to qualify for student loan debt relief is to take advantage of the Public Service Loan Forgiveness Program (PSLF). This program will help people who work in public service positions pay down their loans with substantially less out of pocket. To qualify you need to work for a nonprofit, tax exempt organization that is not political or religious in affiliation. Working for the federal, state, local, or tribal government, including military service, or serving in the Peace Corps or AmeriCorps will also help you qualify. There is no application process as of yet, but your employer will able to point you in the right direction.
Option Two- Income Based Repayment
The Income Based Repayment program is a new program that will help people with student loan debt relief. The idea of this program is that a sliding scale is used to determine the amount of money that is to be paid back in student loans. Since it’s based on a sliding scale there are several possibilities to enter the program. If you make more than 150% above the poverty level for your situation, then no more than 15% of that overage would go towards your student loan payments. If you earn less than 150% of the standard poverty level then your payments would be $0. Note that this program may not cover any interest associated with your loans, so you may still be responsible for that. The program will be available beginning in July 2009.
Option Three- Income Contingent Repayment
This program is similar to the above option, but has some key differences. With this plan there is more flexibility with your student loan debt relief. Every year your adjusted gross income is used to calculate what your monthly payments will be for the next year. You will not be required to pay more than 20% of your monthly income. The monthly payment may vary year by year, but it was designed to help by not creating additional financial hardship. The income contingent repayment option is available for up to 25 years, so you will have plenty of time to repay the loans. Note that with this option you may be required to pay taxes on the amount of the loan that is forgiven, but you still get some student loan debt relief.