Jonnelle Marte wrote about some good news for grads in her June 21 article in The Wall Street Journal Sunday. First she writes about the new Income Based Repayment Plan which starts July 1 of this year. To qualify your have to have a Stafford Graduate PLUS loan or a consolidation loan with William D. Ford Direct Loan or with Federal Family Education Loan programs. Under this program, you can reduce the monthly payment on your loans. The amount of the lower payment depends on how your income stacks up with the federal poverty level, which in turn, depends on whether or not you’re married, have a family, and your state residence. Take 150% the poverty level figure specific to you and find the difference between that figure and your income. If you make less that the 150% figure you will pay $0. Otherwise, the payment will be 15% of the difference if you make more than the 150% figure. This new, reduced monthly payment will give you relief and keep you in good standing, but it will also increase the extent of your loan.
Jonnelle also reminds grads of loan forgiveness. After 25 years of loan payments that qualify, the principal loan balance may be forgiven. To apply for this, you must contact your lender. You can visit studentaid.ed.gov or IBRinfo.org for more information about this program. Don’t forget, too, if you have a Direct Loan and work in the public sector for 10 years, you are eligible for the Public Service Loan Forgiveness Program.
