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Gradually it’s getting tougher and tougher to graduate from college without taking resort to student loans. About 75% of the recipients of bachelor’s degree leave their school not only with a degree but also with huge amounts of debt. Research reveals that the humongous amount of $1.2 trillion in student loan debt is playing a role in preventing the Americans from making any type of big purchases which drive the growth of the economy. Not many are being able to buy new homes to rent an apartment only because they have huge amounts to pay back on their student loans.
The student debt crisis has in fact become so huge that it has even gained attention of the presidential candidates who are watching out for different ways in which they can make college affordable by reducing college and tuition costs. Approximately, around 40 million Americans with student loan debt are desperately looking for ways to manage debt.
Student loans – A sneak peak at the recent changes that can help them pay off debt
After reading such gloomy student loan debt statistics, you must be looking for something positive. Well, students are lucky enough that there are so many new programs which are being brought into effect in an effort to relieve the borrowers from debt. Here are some developments to take note of.
? The REPAYE Program: This program was introduced in 2016 as along with the income-based repayment programs. The REPAYE or the Revised Pay As You Earn programs provides assistance for repayment to a supplementary of 5 million borrowers each year. Borrowers can easily cap the student loan installment in a month to around 10% of their discretionary income. Those seeking help of this program can have their remaining balances waived off or forgiven after they have been making timely payments for 20 years. However, the amount forgiven is taxable.
? Loan repayment assistance is now a workplace benefit: As per a study from the SHRM or Society for Human Resources Management, around 3% of the US employers have started offering loan repayment options as a part of employee benefit. This number will most likely grow as more and more employers start understanding the importance of this benefit. Almost more than half of the respondents of a survey said that student loan assistance was better than 401(k) contribution match.
? Refinancing options sponsored by state: As federal benefits are done away with and eligibility criteria tightened for the large number of graduates, more states now started offering student loan refinancing options for the borrowers in debt. Through their new SELF Refi program, residents in Minnesota with debt could be able to refinance at rates which are as low as 3%. By offer state help, students might just waver from seeking help of private loan options.
? Get On Your Feet Loan Forgiveness Program: This is yet another one-of-a-kind loan assistance program offered on the state level. The Get On Your Feet Loan Forgiveness Program has started in New York and the program provides up to 24 months of debt relief to college graduates who live in the state and meet few eligibility requirements.
? A hope for a new President: It has been unanimously acknowledged that President Obama made a number of changes to the landscape of student loans during his terms. With the 2016 presidential elections, people can again expect a new President and along with him a set of new policies for the students. Though it is unsure about who is going to serve the nation, yet all the Presidential candidates have shared their student loan reform plan. Federal student loan refinancing, reducing loan rates are some changes that would definitely be included.
We have to leave it on time to know whether or not the above mentioned changes will remain or disappear but for now the students have definitely been given easier ways to pay off their student loan debt and live a debt free life.