Student Loan Forgiveness - New Federal Student Loan Repayment Plan Offers Debt Relief Hope

Crushing student loan debt is hammering college graduates. Student loan defaults are soaring toward new records. College loan borrowers have called for debt relief. But now President Obama has proposed faster government-backed loan consolidation and loan forgiveness plans to help borrowers repay their college debts and give a boost to the American economy.

President Obama's decision to expand education loan forgiveness to more students now could very well mean that loans you took out to pay for college may get much easier to handle. Details of his new "Pay As You Earn" program, outlining new rules for repayment, are still emerging.

Loan consolidation at a lower interest rate is the main objective of the plan. Three major features of the plan benefiting college graduates struggling to make their monthly educational loan payments are:

Repayment Term

Each loan that would be consolidated retains its original repayment term. Thus, borrowers will pay less interest over the life of the loan than they would under the traditional consolidation programs.

Interest Rate

A fixed rate (not to exceed 8.25%) after applying the 0.25% interest rate reduction to qualifying loans being consolidated. Lower interest rates means more of the monthly payment pays off the principal balance.

Electronic Debit Payment Benefit

Those who take advantage of this new consolidation plan are eligible for an additional 0.25% interest rate reduction if their loan is repaid through the Department of Education's automatic debit system.

The loan consolidation program will only be made available during a 6-month window, Jan. 2012 through June 2012, so borrowers need to act fast.

The government wants those people holding both private and government student loans to be allowed to consolidate their debts right now into one new government loan. Such a move could slash their interest rates, and save them money in the process as the federal government speeds up roll-out of an income-based repayment program that was originally slated to begin in 2014.

College graduates would still be responsible to keeping making payments on their loans, but those revised payments would be capped at just 10% of their income.

And, best of all for those who borrowed tens of thousands of dollars to finance their college education, their loans would then be forgiven after 20 years.

It is still not entirely clear how many students the new law is aimed at helping; estimates range from 450,000 to upwards of 6 million.

When Congress passed the Income-Based Repayment Plan (IBRP) in 2010 -- the new law which drops the monthly payment to 10% of discretionary income and would forgive all college student debt after 20 years -- there was a long waiting period before it became a reality; it was originally not set to go into effect until 2014. Now, the new terms would take effect in Jan. 2012.

Low-income borrowers would benefit the most. If a student loan borrower qualifies, then monthly payments are based only on any income above 150% of the poverty line ($16,335, the current 2011 U.S. poverty threshold.)

For a graduate living on their own, IBRP payments would be based on what he or she earned over this $16,335. Moreover, if the graduate is unemployed and has no income at all, then no monthly loan payment would be due at all.

Although it is unclear how this monthly reporting would be done, this new debt relief plan still represents a positive step forward toward resolving the debacle affecting untold numbers of college graduates who are struggling to make their college debt repayments. More detailed information on , visit FindHow2.com.

Steps to Finding the Best Bank For Private Student Loan Consolidation

Depending upon the type of student you were, your college experience was either filled with stress, studying and the excitement of reaching new learning vistas - or it was filled with beer, parties, and hanging out with lots of members of the opposite sex.

Either way, it is a fact that you - like all college students - had to come up with a way to pay for the whole experience. Whether you attended a less expensive state school as an in-state resident or whether you went to a fancy-schmancy private university, your student loans likely run into the tens or even hundreds of thousands of dollars.

The reality of having to repay all of those loans hits most grads at one of the worst-possible times: just a few months after graduation. Just when you are faced with the need to find a job, get an apartment, and generally get your post-college life on track, you get hit with your first student loan bill.

Things can even be worse if you have multiple loans, given that you are having to manage multiple payments at once.

However, for those with multiple loans, there is a bright side: you are likely to be eligible for private student loan consolidation.

Who Qualifies For Private Student Loan Consolidation?

If you have more than one student loan through a private lender (i.e., not the federal government but rather through a private bank), you are eligible to consolidate your student loans through a private consolidation lender.

You should consider consolidating if you are less than half-way through your repayment period, if you want to reduce your monthly payments, and/or if you believe your credit score has improved since your initial loans were received.

How Your Consolidation Loan Interest Rate Is Determined

For private loans, your consolidation loan interest rate is determined by a combination of the going prime rate - or other major right like the LIBOR - and your credit score. Of course, your private lender will have some discretion as to your new interest rate, which is precisely why it pays to shop your rate around with multiple lenders.

3 Steps To Finding The Best Bank For Student Loan Consolidation

Here are 3 steps to finding the best bank for private student loan consolidation:

1. Start with a list of at least 3-5 banks: Do your research online to get together a list of at least 3 to 5 banks who specialize in private student loan consolidation. Remember, it is very unlikely that your first offer will be your best, so by researching multiple banks you will have a much better chance of potentially saving thousands of dollars in interest over the life of your loan.

2. Visit their websites: These days, there is nothing like the Internet in terms of conducting efficient, fast and comprehensive research. Start with each company's website. If you like one or more sites and have the time, order an information packet through the mail.

3. Apply to at least 3 of them: Once you have found at least 3 lenders you like based upon your research, apply to all of them. When the offers start rolling in, be sure to wait for all of the offers before making a decision.

Follow these tips in order to find the best bank for your private loan consolidation.

Private Student Loan Consolidation - The Truth

If Federal student aid is not enough to meet your educational expenses, then you can avail of college loans from a private lender. Private loans can also help medical, dental and legal students meet post-graduation expenses, such as the cost of finding a residency or reviewing for the bar, since these are not eligible for Federal aid programs. The advantage of private loans is that you can apply at any time, there are no eligibility requirements as long as you are creditworthy and you don't have to begin repayments until after graduation.

And once you've started repayments, you can take advantage of private loan consolidation programs. Loan consolidation combines all your private college loans into one fixed-rate loan with lower monthly payments, freeing up money that you might need for daily living or job-related expenses. With a consolidated loan, you may end up reducing your monthly payments by as much as eighty percent. However, you cannot consolidate Federal student loans along with private loans.

Other advantages of private student loan consolidation include a longer repayment term (of up to 25 to 30 years), reduced interest rates for borrowers with improved credit scores, deferments on monthly payments of 36 months for military men in active service and 48 months for medical and dental graduates taking up their residencies, and no penalties for over payments, meaning payments in excess of the required minimum go towards repayment of the principal of the loan. Consolidating your loan may also help improve your credit score since it cuts down on the number of open credit accounts that you have.

However, expect interest rates for private student loan consolidation to be higher than those from Federal loan consolidation. Interest for private student loans is based on LIBOR or prime rates, unlike Federal Stafford loans are fixed at 6%-6.5 percent. Also note that some lenders charge fees which could wipe out gains from low interest rates. Try and pick a loan with no fees, even if it charges slightly higher interest rates.

To qualify for a consolidation loan, you should owe at least $5,000 in student loans but no more than $250,000. When applying for private student loan consolidation, it is highly recommended that you apply with a qualified co-signer, as this will increase the chances of your loan being approved and might even qualify you for a lower interest rate. Choose a loan whose interest rates are based on the LIBOR, since it will be less expensive in the long-run. You also need to continue servicing your loans while the consolidation is being processed in order to maintain your creditworthiness.

New Law Favors Those Seeking to Escape Student Loan Consolidation Troubles

New changes to student aid programs put a stop to government giving banks free money while pushing desperate people. A new law eliminated a $60 billion program that supports private student aids with federal subsidies and replacing it with government lending to students. The new changes also affect rates, repayments, student aid consolidation, etc.

By ending the subsidies and effectively eliminating the banks as middleman, the new student aid program would generate $61 billion in savings over 10 years, according to the nonpartisan Congressional Budget Office.

Believe it or not, under the prior Federal Family Education LoN program, the government effectively assumes the risk for aids issued by private lenders, who then pocket the subsidies. The federal government started subsidizing private student loans since 1965 and in the 1990s began lending directly to students.

it's important for you to understand some of the changes affecting the student aid program that took effect on July 1, including:

Now all federal student aids are now issued through the federal government's Direct Aid program. Before these changes, banks and other financial institutions provided federally guaranteed student aids through the Federal Family Education Aid Program, but the new health care reform bill enacted in May ended subsidies for lenders.

Lenders can still offer private student loans. But facing a new reality, in recent months, some lenders, trying to replace the loss of billions in federal student aid subsidies, have lowered their rates and fees for their private aids.

But do not even think about private aid until you have used all the federal student loans since not only the interest are lower that the program is a lot more flexible, specially if you ever confront financial problems.

Rates on some federal student aids have also been lowered. Rates for subsidized Stafford aids, which are available to borrowers who demonstrate economic need, fell to 4.5% from 5.6%. This new rate will apply only to subsidized Stafford aids issued between July 1, 2010, and June 30, 2011, but aids issued before July 1 won't change, he says. The rate for unsubsidized Stafford aids, which are available to all students, remains at 6.8%, says Robert Murray, spokesman for USA Funds, a non-profit company that services loans.

Origination fees for Direct Stafford aids dropped to 1% from 1.5% on July 1.

All PLUS loans (Parent Aid for Undergraduate Students) are now issued through the Direct Loan program. As you remember, these loans were also previously offered by private lenders, as well as through the Direct Aid program.

The rate for Direct PLUS Aids is 7.9% vs. 8.5% for FFEL PLUS Loans. Parents can use PLUS aids to pay for any college costs that aren't covered through Stafford aids and financial aid. Graduate students are also eligible to borrow through the PLUS program.

Student aid consolidation help

The new law could provide relief for graduates who are in financial troubles or that aren't making enough money to afford their aid payments.

Borrowers doing student aid consolidation can use the income-based repayment program to have their loan payments reduced, based on income and family size. This is important because for most eligible borrowers, aid payments can be less than 10% of their income.

Married couples will no longer be penalized. The new law ended another affair practice of when couples filed a joint tax return, the program assumed that both spouses could use 100% of their combined income to make loan payments. When both spouses had student aids, the minimum payments were much higher than the minimum for unmarried borrowers with the same debt and income. But the new calculations take into account married couples' combined income and their combined debt to calculate minimum payments.

Eligibility for income-based repayment will be based on the balance when the aid went into repayment or the current aid amount, whichever is greater. This is another important change benefitting borrowers who have gone into forbearance or deferment.

Get the Best Student Loan Consolidation Rates

These days, a college education is one of the best ways to get a high-paying job and further your career. But with the skyrocketing cost of higher education, many students have to take out student loans to pay for college.

By the time you graduate, you may have multiple loans to pay off. Refinance may be your best option, in which case you will have to find the best consolidation rates to make your monthly payment a lot easier.

By consolidating your loans, you will be able to get a single loan and pay off your individual loans. You will end up making only one payment each month.

By getting the best rate for the consolidation of your student loans, you should be able to lower your interest and monthly payments. You should also be able to increase the term of the loan, further reducing the monthly repayment amount. This is a great boon especially if you are just starting out with your career and your income is low.

If you were able to obtain federal student loans, you may be able to apply for a government student consolidation loan. The rate for a government loan is typically lower than the rates offered by private lenders.

If you obtained your loans from private lenders, you will have to refinance and consolidate your them with a private lending institution. Be sure to get the lowest consolidation rates to reduce your payments.

Two types of loan consolidations are offered by lenders. With the fixed-rate type, your monthly repayments will remain the same until the loan is paid off. The term of the loan is typically 10 to 30 years.

A flexible or graduated loan allows you to make lower payments at the beginning. The amount increases over the term of the loan. Compare the different options available, including the interest rate and term of the loan. Try to negotiate for a loan that is affordable in terms of monthly and total payment.

It's also a good idea to find out your credit rating before you look around for a lender. Knowing your credit rating may give you more leverage or provide you with a realistic idea of what your consolidation rate will be.

It is important to find a good rate for your student loan consolidation. Shop around and search online for the best available rates. You could be paying for your student loan for many years, so it is vital to get the best deal possible.

Fixed Rate Private Student Loan Consolidation - Top Way To Go

Do you know fixed rate private student loan consolidation can help you fix challenges like searching for a way to make student loans convenient? And searching for a very low payment along side a very low interest rate? Yes, indeed it can help you get what you are searching. These are a few of the information you will need to know.

1.When talking about this type of loan consolidation it entails you combining your loan to become one using one payment. Obviously, this is brilliant way of making things easier on the student because the task of managing numerous payments is no longer on the student side. That is one company, one payment, one due date and one interest.

2.When searching for this kind of private student loan consolidation you need to make concrete inquiries so to be sure of the company you are choosing will care for this in the right way. You can ask them the type of options the present if you wish to return to school. What you as a student should be searching for is an answer like this-that if you go back to school your loan will repeatedly go into education determent. This means that you will not have to pay on it.

3. One must bear in mind to rank high in your credit rating because the creditors and lenders take this very significant. A better way of having high credit rating is by going for a fixed rate private student loan consolidation service and it is made promising because you are paying them all at once and not the lending companies. In general, consolidation allows you to have only one company instead of having two or more.

4.Finding out what will happen if hard financial times come unknowingly. Is very imperative for you to know because you will want to protect your credit. If forbearance plan is presented that can be used in times of hard financial condition you can go for it. This is a period of time which you do not pay on the loan. It last for six months.

Fixed Rate Private Student Loan Consolidation - The Best Way to Go!

Are you looking into a way to make your student loans more manageable? Do you want a lower payment along with a lower interest rate? You can use what is called fixed rate private student loan consolidation in order to help yourself get what you are after. Here are some of the details that you will need to know.

First, when it comes to using fixed rate private student loan consolidation you will be rolling all your loans into one with one payment. This is an excellent way to make life easier on you because you will no longer have to manage multiple payments. You will have one payment, with one interest rate, one due date, and one company.

Second, with fixed rate private student loan consolidation you do need to make sure you pick a company that will treat this the right way. You want to ask them what type of options they offer if you decide to go back to college. They should tell you that if you go back to school your loan will automatically go into an education deferment and you will not have to pay on it.

Last, you should also find out what happens if you come across hard financial times. This is important because you will want to protect your credit and you can do so if they offer a forbearance plan that you can use during a tough financial situation. This is usually a 6 month period where you do not have to pay on your loans.