Changes In Debt Laws Will Help Pay Off Student Loans
The money market keeps on changing continuously for earning more from lending as well as to make the services better. Similarly, there are also changes made in the debt laws constantly to make sure that the debtors are not deprived or harassed in the process of loaning or during debt collection. The recent changes in the debt laws as formulated and laid by the government have made it easy for the people struggling with their student loan to pay it off easily.
In these days, it is quite expensive to be an average student. If you consider the different studies conducted and the reports published you will see that:
- An average college graduate who took out student loans during their college life and left school found them in debt often ranging over $37,000.
- The picture at the law school arena is even bleaker for a few majors where the average student loan debt for the fresh grads is over $140,616 and
- As far as the medical students are concerned it is the worst as it ranges well and above $161,722 in student loans.
Therefore, starting a new life with such a debt burden on their shoulders, students often find them in the debt hole perpetually, frantically looking for ways to come out of it and get rid of their debts. They look for different debt relief options and go through different debt settlement and debt consolidation reviews to make a choice between the two.
While every approach has its significant pros and cons, it is required that you do some research while you make such a choice.
Fortunately, the law provides a lot of protection to the consumers while taking on debts as well as offers a wide variety of new debt relief programs with a couple being introduced each year. The government does this in an effort to provide the debt seekers with relief.
Therefore, if you are looking for a student loan repayment help these following developments in the debt law will provide you with a lot of hope as well as open up a lot of useful and effective avenues to deal with your student loan debt.
The introduction on REPAYE
Sometime back in 2016, the government introduced REPAYE as a confidante to all other income driven repayment programs. This is actually the abbreviation of Revised Pay As You Earn. This is an effective program as tit provides a lot of options, opportunities and protection to the borrowers such as:
- It opens repayment backing up to an added 5 million debtors each year
- The borrowers can cap their monthly repayment of student loan at 10% of their discretionary income and
As an added bonus, the borrowers who take up the REPAYE program can now have the opportunity for forgiving any remaining balances. However, to enjoy this benefit you will have to continue making your payments for about 20 years right on time till now.
Moreover, this 20 year limit is made to the undergraduate students and for the graduate students it is 25 years. However, the catch here is that you will need to pay income taxes on the forgiven amount as per the Internal Revenue Service requirement once you exit the program.
A workplace perk
The law also ensures that student loan repayment assistance is now provided as a workplace perk. It was found in a study from the Society for Human Resources Management, SHRM that about 3% of US employers have started offering student loan repayment assistance to their employees as an additional benefit.
- This number is expected to grow as more and more employers are realizing the need for providing such perks to their fresh recruits.
- Inclusion of this specific perk along with other existing packages will also attract more young talent towards the company.
In fact, another recent survey conducted on the student loan benefits by Student Loan Hero showed that about 50% of the respondents valued such student loan repayment perk over a 401(k) employer benefits.
This shows how important such student loan helps have become for the young workers as well as how it will transform the benefits packages provided by the companies all over the country.
State sponsored refinancing options
Changes have also been made in other areas of Federal benefits and new state sponsored refinancing options are introduced when other benefits are exhausted and the requirements tightened for the ever increasing number of fresh graduates with student loan debt. More and more states have started to offer their own student loan refinancing options for the borrowers.
With these refinancing options students with debt can now legally refinance at rates that are as low as 3%, provided they meet the specific requirements to enjoy such benefit.
The primary objective of these programs is to help the students to deter from taking on private loan products. These state run lifeline will help them to stay away from these pricey and often predatory loan products.
Get On Your Feet Loan Forgiveness Program
This is a new program that is introduced this year for the horde of grateful students. This Get On Your Feet in New York is a one-of-a-kind student loan repayment benefit that the states offer.
Though this program has a few limitations in its scope as it is available only to the students residing in New York, this is very useful otherwise. It offers up to 24 months of federal student loan debt relief to all recent college graduates that meet the specific eligibility requirements of the state.
Changes made by the President
President Obama has made a few key changes to the student loan setting during his terms that are undoubtedly very helpful for the students struggling with debt. These new policies are so useful that even the presidential candidates have also started making student loan reform plans some of which are more robust than the others. Some of these changes include:
- Instituting federal student loan refinancing
- Reducing student loan rates and
- Making college free.
However, time will tell whether these changes in legislation will stand the test of time and eliminate this huge problem for good.
