Student loans remain a major issue for many college students, as both current and past students are still having to deal with student loan debts, and some may be in a position where a high amount of debt obligation is present. However, many students are aware that there may possibly be forgiveness options for these loans, but questions over costs and the benefits of these plans have often arisen. Obviously, there are some graduates who may be able to have their loans discharged after 10 years, provided they are in a public service field, but there may also be opportunities for students to have their debt discharged after 25 years, which may be helpful for some due to the sizable amount of debt they have and their inability to meet even minimum payments.
In the past students have been able to take advantage of federal assistance programs when it comes to repaying their federal student loans as income-based repayment initiatives may allow students to lower their monthly payment amount, consolidation loans have been able to help some in this fashion as well, but when it comes to qualifying for student loan forgiveness opportunities, there are questions as to whether graduates will be able to benefit from these repayment options even when they may have their loan discharged at a certain point.
In some cases, if a student has been able to budget in such a way that allows them to make more than the minimum payment on their federal student loan, they are in a position to pay off this debt faster and reduce the overall amount of costs they must meet when it concerns interest rates. Understandably, this is not always an opportunity that some graduates may have as the current job market has made it difficult for some to find employment, let alone a job that will offer them the income to easily pay more than maybe required on their debts. Also, when it comes to these repayment plans, some students may get a lower rate on a monthly basis, but if they are in a position where their debts will have to be paid off over a longer period of time, like those who may be able to have their debt forgiven after 25 years, they might end up paying more when interest is factored in, despite the fact that a student may be given a lower monthly payment.
Understandably, if a student is given an affordable payment through an option like an income-based repayment program or consolidation loan and can have their debts forgiven after 10 years, this could save a great deal of money over time, particularly when excessive college loan debt is in place. Yet, some students are simply not in a position to take advantage of this debt forgiveness option after such a short period of time and may look to either lower their monthly payment at the present time in the hopes that they may qualify for forgiveness years down the road. Some students in income-based repayment program may one day find themselves in a better financial position and this would obviously increase their minimum payment each month, but for those who have consolidated their student loans and are paying an affordable rate, only meeting this minimum payment could potentially lead to the higher overall costs which may be avoided if a student can budget and simply pay more than their minimum payment.
While this may not be an option currently for some students, advisers often counsel graduates to look at how much they are paying in interest versus their student loan principal, factor in their overall costs that will be paid once they have erase their debt or reach a time where forgiveness may be granted, and if this particular repayment route is not to their advantage it will obviously benefit these men and women to apply as much as they can towards their debt when their financial situation improves as paying off these loans quickly will obviously save a graduate on interest.