By Drew Kessler You’ve done it. After years of hard work, you’ve finally earned your degree and graduated from college. What’s next? Finding a job and a place to live, budgeting for basic living expenses, and hopefully starting to put money away for the future. For about two-thirds of college graduates, paying off student loan debt is an additional priority. The average graduate leaves school with around $26,000 in student loan debt, a figure that continues to climb each year. While most college graduates may share similar student loan obligations, not all reach the same level of financial success after graduation, and a growing number of borrowers fall behind on their loan payments. There are options available for struggling borrowers, yet whether due to lack of awareness, or confusion over how to apply, the number of borrowers enrolled in these programs remains relatively low. One such program is Income-Based Repayment (IBR), which calculates payments based on income and family size, rather than the amount of your student loan debt. IBR has been available to borrowers since 2009, and most types of federal loans are eligible for enrollment in the program, with the primary exception of PLUS loans that are made to parents. Private loans don’t qualify for IBR. Borrowers experiencing a partial financial hardship who enroll in IBR can benefit from:
- Payments set at 15% of their discretionary income
- Student loan forgiveness on any remaining balance after 25 years of qualifying payments
- Loan forgiveness after 10 years of working in public service.
Monday August 17, 2015/