You may have seen advertisements for the Obama Student Loan Forgiveness Program while searching for student loan providers.
And you might be asking yourself how this program stands up to other student loan relief programs.
Is this program one that may help you on your journey to debt relief?
The internet has overwhelming amounts of complicated and detailed information on this topic.
So, we hope to break it down in simple and understandable terms.
Here’s what you need to know about the Obama Student Loan Forgiveness program.
(Did You Know? Laws surrounding forgiveness and student loans are constantly changing. Don’t wait to take advantage of forgiveness or see if you qualify. Use the Definitive Guide to Qualifying for Student Loan Forgiveness to figure out if you can qualify and how to apply for forgiveness. Click here to learn more and get the free guide.)
What is the Obama Student Loan Forgiveness Program?
Federal Direct Loan Program
The Obama’s Student Loan Forgiveness Program, officially known as the reformed Direct Loan Program of 2010 signed by President Obama, exists to expand the available benefits of the current federal student loan program.
Because of the increasing amount of individuals drowning in student debt, this revamp of the federal government’s loan forgiveness program is crucial.
Some of the most significant changes in the existing law include but are not limited to the following:
- Complete forgiveness of a federal student loan after 20 years, instead of 25 or 240 qualifying payments.
- Improved rules for the Public Service Loan Forgiveness Program.
- Termination of subsidies to private lending institutions for federally backed loans.
- Introduction of Revised Pay As You Earn Plan (REPAYE).
The federal direct loan program is legitimate financial aid the US government offers.
The Obama Student Loan Forgiveness Program is a popular nickname for the government’s program.
In fact, some private companies use this as part of their advertising strategy to attract more clients and charge extra fees.
Although loan providers use a multitude of marketing strategies to attract potential clients, it is important to realize that only the government offers federal student loan and debt relief programs.
What are the Benefits?
Aside from the above-mentioned reforms, this program allows federal student loan borrowers to consolidate their accounts.
They can also take advantage of different repayment options and apply for several partial and complete student loan forgiveness programs.
Income-Driven Repayment Plans
The Income-Driven Repayment Program intends to support low-income earners by setting a monthly payment based on certain percentage of an individual’s discretionary income.
After 20 or 25 years of payments, you can qualify for complete forgiveness of the remaining balance of your loan.
The different repayment plans include the following:
- Revised Pay As You Earn Repayment Plan (REPAYE)
- Pay As You Earn Repayment Plan (PAYE)
- Income-Based Repayment Plan (IBR)
- Income-Contingent Repayment Plan (ICR)
Public Service Loan Forgiveness
The Public Sevice Loan Forgiveness Program allows individuals with a direct federal loan to qualify for complete forgiveness after making 120 qualifying payments.
To qualify, the borrower needs to work full time at a government or not-for-profit organization.
(Did You Know? Laws surrounding forgiveness and student loans are constantly changing. Don’t wait to take advantage of forgiveness or see if you qualify. Use the Definitive Guide to Qualifying for Student Loan Forgiveness to figure out if you can qualify and how to apply for forgiveness. Click here to learn more and get the free guide.)
Teacher Loan Forgiveness
Another way to seek forgiveness of your federal student loans is through the Teacher Loan Forgiveness Program.
To qualify for this program you must teach and work full–time for about five consecutive academic years with a low-income educational institution.
You may receive up to $17,500 in forgiveness on your unsubsidized and direct subsidized loan upon qualifying.
Student Loan Cancellation and Discharge
There are other student loan relief programs the government offers, some of these generally allow temporary or total discharge of a federal student loan.
Some of these programs include the Perkins Loan Cancellation Program and Unpaid Refund Discharge Program.
While programs offering complete and partial forgiveness are available, it is important to make payments consistently and on time until you find the right program to be a part of.
Leaving loans unpaid will never reward you, even if you believe you may be eligible for total or partial loan forgiveness.
Watch this video by Client Success Manager, Marques McBride to know more about Obama student loan forgiveness:
https://www.youtube.com/watch?v=3Fpiu_D4eTM&t=2s
Is trying to pay your student loans adding stress to your life?
There are certainly many ways to seek relief and forgiveness of your student loans.
Check to see if you qualify for one of these programs and start enjoying federal benefits.
(Pro Tip: Need an easy and fast way to find out if you qualify for student loan forgiveness? Download this free guide to find the best way you can take advantage of student loan forgiveness programs. Learn more here.)
What is your opinion about the Obama student loan forgiveness program? Do you think they are particularly beneficial? Share your thoughts with us in the comments section below.
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