Its common
knowledge and an agreed sentiment among many American citizens that the hard
working teachers of our country are underpaid for the vital role they play in
educating this nations' youth. However getting the education needed to become a
teacher is not cheap and requires many aspiring teachers to take out student
loans.
Thankfully there
are options put in place that teachers can take advantage of to get relief of
these student loans. There is a lot of mystery surrounding how student loan
forgiveness and student loan consolidation programs work and how they can help
financially struggling teachers. Currently the government is offering
assistance with these programs from the Department of Education. In this
article I will explain how the three student loan relief programs work and how
teachers can best take advantage of it.
Student Loan
Consolidation: Right now if you have federally backed student loans you more than
likely qualify for a consolidation. The benefits of consolidation are one
monthly payment and lower interest. The vast majority of teachers who have
federally backed loans will qualify and in most cases will be able to save a
considerable amount of money each month on what they are currently paying.
Income Based
Repayment: The IBR plan is another consolidation program for people who are
struggling financially. The same benefits as a standard consolidation apply
with the exception that your monthly payments are based on two factors, your
income/budget and number of dependants. Depending on how bad your current
financial situation is you may qualify to pay $0 per month and still stay in
good graces with your lender. Each year there is an income review and your
payments can be adjusted either up or down depending on where you are with your
income.
Student Loan
Forgiveness: For people working in the public service field, which teachers do, there
is a student loan forgiveness program. Once you qualify for this program you
will only have to make 120 more payments (10 years) and then the remainder of
your loan is forgiven; this saves years off of most people's current payment
plan. Also keep in mind the forgiveness plan can be combined with the income
based plan.
So for a struggling
teacher getting on the IBR plan combined with the forgiveness plan will be very
helpful; you may qualify to pay $0 or very little per month and if you remain a
teacher than in ten years your loans are forgiven. The one caveat to the
forgiveness plan is that you must remain employed in the public service field
for the entirety of the plan, so if you think you are going to stop teaching
before than this may not be for you.
Common
Misconception: When people hear the word forgiveness they assume that means their
loans will be completely written off and they will have to pay nothing.
Unfortunately that is not the case, as beneficial as all of the above mentioned
programs are they are not a forgiveness in the sense where people pay nothing
(unless you qualify for the IBR).
Possible Problems: For some
reason the government makes getting these consolidation and forgiveness plans
an extremely hard task. The majority of people cannot figure out the how to
correctly get this loan underwritten to receive the maximum benefits possible.
And the loan could take up to 90 days to process so if anything is done wrong
you either have to do it over again or will get a loan that may not be best
suited for you.
Solution: Thankfully there
are companies that can be of assistance in helping make sure teachers get
approved for the best consolidation or forgiveness program available. Typically
these companies charge a nominal fee for the in-depth underwriting process that
must take place to ensure approval goes through. It is highly recommended to
use such a company and avoid complication while ensuring you are getting the
maximum benefits possible. These programs were designed with the teacher's best
interest in mind so if you find yourself struggling than take advantage of the
options that you have.
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