Consoldating student loans
If the full amount borrowed is still not paid off after 25 years of these payments, the remaining balance is forgiven.Students who have already started repaying loans can opt for the income-based repayment plan, but there is an important caveat: Doing so will restart the clock and give your loan a new term of 25 additional years.The rate is defined as the difference between the person's adjusted gross income (the amount on which you are subject to pay federal taxes) and 150% of the federal poverty level (which comes out to ,245 for an unmarried person with no children, based on current rates.) For an unmarried individual with no children and an adjusted gross income of ,000, monthly payments would be capped at 5.An increase in salary would mean an increase in the monthly payment.
Starting this July, borrowers who have federal student loans can opt for a new income-based repayment plan.If you don't understand something, ask the lender until you get a straight answer.After all, you're entering into a contract that can last as long as 30 years.If, for example, you stretch out a standard 10-year student loan to 20 years, you can cut monthly payments by 34%, but you will end up paying double the amount of interest over that time, Kantrowitz says.If some or all of your loans were written before July 2006--say, in your freshman year of college if you are graduating this year--wait until after July 1, 2009 to consolidate, Kantrowitz suggests.
Like her, many consider consolidating their loans as a way to lower their monthly payments and simplify their finances.