Millions of Americans are drowning in student loan debt. Bankruptcy can make it easier for you to pay your student loans by eliminating all of your credit card debt, medical debt, and personal loan debt. Many people who struggle with paying student loans find it a lot easier to make those payments when all of their other debt is eliminated.
However, what do you do when the students are the only real debt problem? For most people in this situation, bankruptcy does not offer much help.
For some with people student loans, there are some debt relief options outside of bankruptcy.
Teachers may apply for grants available through the federal Teacher Loan Forgiveness and Teacher Cancellation programs to assist with getting out of student loan slavery. If you are teaching in a low income school, you must check out these programs and see if you qualify.
Other groups of people who may qualify for student loan forgiveness programs are:
- people who volunteer for the Peace Corps
- members of the U.S. Armed Services
- Nurses and medical technicians
- Law Enforcement and Correction Officers
- Head Start Workers
- Child or family service workers
- Professional providers of early intervention workers.
For more information about these opportunities, click here.
Other options are loan repayment programs. Under the Income-Based Repayment plan, the maximum monthly loan payments will be fifteen percent of discretionary income, which is the difference between a borrower’s adjusted gross income and on-hundred fifty percent of the poverty guideline for the borrower’s family size and state of residence.
Under the Pay As You Earn Repayment Plan, the maximum monthly payments will be ten percent of your discretionary income.
In contrast, the Income-Contingent Repayment Plan requires payments that are recalculated each year based on the borrower’s adjusted gross income, family size, and the total amount of any Direct Loans.
Under the Income-Sensitive Repayment Plan, the monthly payment is based on annual income, and payments changes as the borrower’s income changes.
Personally, I don’t believe that these programs go far enough in ending the economic slavery of student loan debt. I know many professionals who are still paying on their student loans well into their forties. The solution is that student loans should be dischargeable in bankruptcy just like they were in the 80s. It in way past time for someone to stand up and run for Congress on this issue.
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