Can My Online Education Financial Aid Loans Be Forgiven through the IBR Program?
Everyone likes to get things for free. I've seen people knock each other over shopping the day after Thanksgiving to get a free trinket that is being given away, no matter how cheap or ugly it is. And no one can pass up so much as a free pen sitting on a desk at the bank. Free is fun. But far better than free pens, trinkets or even Tshirts, is free money. And yes, you can get free online education financial aid in the form of grants and scholarships, but also in the form of loans that do not have to be paid back entirely. You can, really, get your degree online for free, well, at least for partial cost.
Brief Recap of Online Education Financial Aid
If you have read some of our other articles, or talked to your school's financial aid department, then you know that you have a variety of online education financial aid options. When it comes to money that does not have to be paid back you have private scholarships, school funded scholarships and federal government grants. These options can all work for anybody as some are based on financial need, others are based on past grades or on the field you are entering.
These options are the best for paying for school, and most people can get at least a little money towards their online education in this way. However, most people still need a bit of extra help from student loans, but what you may not know is that there are ways - legitimate, legal ways - that student loans do not have to be paid back, at least not in full.
Getting Free Money
So, I'll be you are thinking that I mean bankruptcy or something similar. Nope. I would never, ever suggest that someone take on a loan of any type with the intention of bankrupting out of it - how dishonest! Furthermore, student loans are usually not able to be discharged in bankruptcy. What I am talking about is a relatively new government program called income based repayment (IBR) for Federal Stafford Loans.
The way a Federal Stafford Loan usually works is that you get the loan while you are in school. Then, six months after you graduate they start billing you monthly payments based upon the loan amount and a standard formula. On $25,000 worth of student loans your payment would be between $200 and $250 a month, depending upon your interest rate. For many people this payment is challenging, particularly those first years in the workforce.
When it comes to online education financial aid, you need to know that your student loans may now qualify for income based repayment. On this program, your student loan holder (the bank who you pay your payment to) will calculate a payment that you can afford, based upon your income. This can be a life saver, allowing you to pay your loans rather than going into default and destroying your credit. Awesome, right? But, there is more.
Another great feature of the IBR program is that if you get on this program and things do not improve as you hope, and your income always stays somewhat low, you can stay on this IBR plan indefinitely. And, after 25 years on the plan the Federal government will pay off the balance of your loans. That is right, they will go away! And, if you are going into teaching it gets even better. If you are a public school teacher, after just 10 years of payments They will forgive the rest of your loans! For school teachers, you can easily end up paying less than 20% of your original loan balance.
When it comes to your online education financial aid be sure to ask your bank about IBR after you complete school. This program can help make your payments easier as you establish yourself, or even result in free money after 10 or 25 years.
Do you have existing student loans and have registered for the IBR program?
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