Why Student Loan Forgiveness is Beneficial
Student loan forgiveness is something that is possible today. Because of the advantages it gives to borrowers, many schools to today are getting this new program. There are benefits to this program for those who apply for student loans. The student loan forgiveness will really allow the borrower to have the ability to combine all their federal student loans into one new loan. And because of this, the borrower will be able to choose a repayment plan that is affordable for them. Below are some of the repayment plans students can pick from and their advantages.
The first repayment plan is the standard repayment. Each month, the borrower is allowed to pay the same amount in this repayment plan. In the standard payment, the monthly payment does not rise or fall; it just stays the same for as long as the loan lasts. How much the student’s monthly bill will be will depend on his or her borrowed amount, interest rate, and term of the loan. The benefit of this repayment plan is that you can save ahead for your monthly payments because the amount is already determined. This is true because of the fixed amount of repayment for the standard repayment plan.
The next repayment plan is the graduated repayment. In this type of repayment plan you pay a lower rate in the first years of the loan and then the amounts are increased as the school years go on. Every two years the monthly repayments will increase in amount. For those who cannot give a big repayment at the start, this is very beneficial. If a student has a low budget at the start of the repayment then there is nothing to worry about when she starts the student loan forgiveness. As the years go on, the student can save money and increase the repayment amounts.
And finally, the third repayment plan here is the pay as you earn. This pay as you earn plan usually has the lowest monthly payments. In this plan you pay only ten percent of your monthly income. However, the pay as you earn plan is a little more difficult to be qualified for because there are more qualifications and specifications that you have to undergo. But for those who will be able to pass the qualifications and specifications, they gain the benefit of doing the pay as you earn plan. In this repayment plan, you will have very low monthly payments. Although many would want to get the pay as you earn repayment plan for the student loan forgiveness program, not many may be eligible because only those who pass the qualifications and specifications can use this repayment plan which is very beneficial to those who use it because the monthly repayments are really very low.
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