2015
Staying Out of Default
Student Loan Lawyer / 0 Comments /In today’s world, many former students are saddled with very high amounts of student loan debt and very high monthly payments. As a result, borrowers are often faced with the prospect of defaulting on their student loans. However, borrowers should consult an attorney specializing in student loan law because options do exist to stay out of default on student loans.
In particular, the federal government has promulgated rules and regulations that provide for reduced monthly payments and forgiveness of student loan debt. There are several plans offered all with acronyms. There is IBR. ICP, Paye, and ISP. To qualify for these plans the borrower must have what is called a financial hardship. Once it is determined that a hardship exists, the choice of plan will depend upon when the loans were taken out. What is true of all of these plans is that they offer lower monthly payments, extend the repayment term and offer forgiveness of the student loan debt after 20 or 25 years. At the time of forgiveness, there will be a tax liability created based upon the borrower’s tax rate and the amount of debt forgiven.
If a borrower believes he or she may be close to default, it pays to have a consultation with a student loan attorney to discuss these plans.
No comments so far!
Leave a Comment