A growing number of people get student loans as they don’t have other means to pay for college fees. While no one can argue that getting a loan is a necessity for many people, it’s also unquestionable that student loan debt can put the future of many people at stake.
No one likes to be under the burden of debts, so people adopt different methods to get rid of them. Some try to find a shortcut and use illegal ways to pay their loans and or do shady business. While there are minor chances that they would be able to pay off their loans, there are huge chances they would fail and end up in jail.
You don’t need these methods to get rid of your student loan debt, as there are many smart ways to get rid of the burden. You can make use of them to prevent many troubles that could arise in the future.
Here are some smart ways to get rid of the Student debt loans:
Student Loan Forgiveness Program
This program only applies to people with federal college loans. There are many people who are unable to repay their loans and the interest on those loans, so the US government introduced the loan forgiveness program to ease the burden. There are three popular student loan forgiveness programs. The most popular is the Public Service Loan Forgiveness Program. This forgiveness program applies to only those who have worked in public service for 10 years. So, people with government jobs, as well as non-profit jobs can take benefit from it.
The other popular programs are Teacher Loan Forgiveness and Perkins Loan Cancellation. The former program is for high school or public elementary school teachers who are unable to pay their loans. Only those teachers qualify for this program who have taken loans after Oct 1, 1998. The latter program is for eligible nurses.
Income-Based Repayment Plan (IBR)
The most common repayment plan for borrowers who have come into financial hardships is the Income-based Repayment Plan (IBR). According to this plan, a borrower will make payment for 25 years, and then, the remaining balance will be forgiven.
According to this plan, if a borrower has taken out loans before July 1, 2014, then the payment will not be higher than the 15% of the borrower’s discretionary income.
If the borrower has taken loans out after July 1, 2014, then the loan will not be higher than 10% of the discretionary income, and the loan will be forgiven after 20 years.
The Avalanche Method
To pay off Student loans, one of the smartest ways is the debt avalanche method.
The Debt avalanche method is a popular repayment strategy. In this strategy of repayment, a borrower works towards paying off loans with higher interest first as a priority while on the other hand making minimum payments on other loans. This idea basically targets the high-interest debt that is costing you more money in interest payments.