Saturday, March 31, 2012

A Mind Is A Terrible Thing To Spend Too Much Money On....

I was supposed to have this post done earlier this week, but the pressures of work, life, and laziness were overwhelming. Sorry.

Explanation of Findings

The loan repayment programs that I found were mostly for government workers, non-profit organizations, and educators. Although the majority of the programs are workers within these fields (mainly due to the lower salaries paid within these areas), make sure that your current employer doesn't offer education assistance or loan repayment programs. Contact your HR or benefits representative for that information.

Public Service Loan Forgiveness (PSLF)

This program is available to anyone who works in a "public service" job. This could be a government agency (including local, state, and federal govt, military, public schools, etc), a 501(c)(3) non profit organization (501(c)(3) identifies tax exempt non-profit org), Peace Corps, and Ameri Corps. You must be employed full-time (average of 30 hours per week), regardless of your position within these organizations.

  • Qualifying Loans and Repayment Conditions 
You must have Federal Direct Loans to qualify for this program. These loans include Federal Stafford, GRAD Plus, etc. FFEL and Perkins Loans are not eligible UNLESS you consolidate them in Direct Consolidation Loans. If you are unsure about the types of loans that you have, contact your loan servicer. In order for your loans to be forgiven, you have to make 120, on-time monthly payments. That's 10 years. The payments are counted from October 1, 2007. You must maintain employment in these areas during that time. At the present time, the Department of Education is developing an application to the program, but in the meantime, keep accurate records of your employment dates and payments so that you can received proper credit. I have personally called and verified all of the information I have provided, but please research for yourself. I have provided links below.

There are also two conditions in which the Department of Education will allow you to participate if you do not meet this criteria (I copied this directly from the Department of Education's website):

1) your employer is not "a business organized for profit, a labor union, a partisan political organization, or a non-profit organization engaged in religious instruction, worship services, or any form of proselytizing;"

2) your employer provides any of the following public services: emergency management; military service; public safety; law enforcement; public interest law services; early childhood education; public service for individuals with disabilities and the elderly; public health; public education; public library services; and school library or other school-based services.

Helpful Hints

  • If you qualify for this program and would like to take advantage, but can't afford the monthly payments, consider Income-Based Repayment (IBR). This has been around since 2009, and bases your payments from your monthly income. It can be used with pretty much any type of loan EXCEPT Parent Plus loans. Payments are usually less than 10% of your income. 
  • Consolidation Consolidation combines several loans that you may have with different services into one payment, but BE CAREFUL!!!! I was looking to consolidate my undergrad and graduate school loans, but learned that my undergrad loans had a lower interest rate, and if I consolidated, it would go up by 4%! I'm in the process of learning how I can keep my low interest rate, not sure if I will be able to, but I will pass along any info that I find. 
  • Of course this program is for those who would normally have loans that require repayment past 10 years. If your debt is not that much, just work out a plan with your servicer. I have learned that as long as you make some type of repayment attempts, they are more likely to work with you. Imagine the people who have made up their minds that they WILL NOT EVER pay back their loans. lol I'm sure its refreshing to them when people actually make the effort. 
  • Being debt free is one of my goals in life. If I can rid of them by the time I'm 38, I think that's great! Although, my debt is not as great as a lot of folk's, I still would like to pay them off. By using this information I have provided to you, I took my 50,000 debt and squeezed it into $178 a month. 
There are even more programs available to teachers, but since I'm not an educator, I didn't spend any time researching it. But make sure that you do if you are in that field.

Hope this information helps! If not.......*insert rude comment*

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