Student Loan Services


Student Loan Services

Reduce your debt
If you are one of the millions of former college students facing an impossible amount of debt to repay, there are a variety of government programs set into place in order to help you pay back your loans in a timely and more reasonable manner. The William D. Ford Direct Loan program (with some additions, The Obama Student Loan Forgiveness Program) aims to provide more ways to do so. Learning more about and applying for these programs is a great way to not only lessen your monthly payments but also improve your credit.

What is Student Loan Forgiveness?

Obama Student Loan Forgiveness Program
Student loan debt is often cited as being one of the biggest modern financial crises. Many former students face an impossible amount of debt and in turn, political leaders have been looking for a way to solve these issues. “Obama Student Loan Forgiveness” is a nickname for the William D. Ford Direct Loan program. The name came about when President Obama reformed part of the Direct Loan program in 2010 by signing the Health Care and Education Reconciliation Act of 2010. Student Loan Forgiveness programs have been set into place in order to help aid former students in paying for their education following graduation (sadly, these programs are only applicable to students with federal student loans, not private).

How Obama Student Loan Forgiveness is Different

The Direct Loan Program (FDLP) is the only government-backed loan program in the United States. It is commonly referred to as Obama Student Loan Forgiveness because, in July of 2010, President Barack Obama introduced new loan programs enacted under the Health Care and Education Reconciliation Act of 2010. As a result of expanded funding for federal student loans, more borrowers gained access to more options with loan repayment.

President Obama made the following changes to federal student loan forgiveness:

The federal government will no longer give subsidies to private lending institutions for federally backed loans.

Borrowers of new loans starting in 2014 will qualify to make payments based on 10% of their discretionary income.

New borrowers would also be eligible for student loan forgiveness after 20 years instead of 25 on qualifying payments.

The money will be used to fund poor and minority students and increase college funding.

What Are The Benefits of The Obama Student Loan Forgiveness Program?

In this program, there are many benefits that a borrower can take advantage of. The borrower has the ability to consolidate all their federal student loans into one new loan, and in that consolidated loan, the borrower is able to choose a repayment plan that is affordable.

The Five Different Repayment Plans

The Five Different Repayment Plans

1Standard Repayment
The borrower will pay a fixed amount each month for the life of the loan. The payment would be determined by your borrowed amount, interest rate, and term of the loan.
2Graduated Repayment
The borrower would make payments lower than the standard repayment plan, but would gradually increase every two years.
3Income Contingent (ICR)
In this plan, the borrower would make payments based on their income, family size, loan balance, and interest rate.Borrowers in the ICR can have a payment as low as $0.00/mo
4Income Based (IBR)
This plan bases the borrower's payment strictly on their income and family size. The balance of the loan and interest rate are not used in calculating the monthly payment. The borrower would be responsible for paying 15% of their discretionary income on their federal student loans. Borrowers in the IBR can have a payment as low as $0.00/mo
5Pay As You Earn (PAYE)
This plan usually has the lowest monthly payment, and is also based on your income but uses 10% of your discretionary income as a payment instead of the 15% used in IBR. Qualifying for the PAYE repayment plan is more difficult than the others. Borrowers in the PAYE can have a payment as low as $0.00/mo
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