Nationwide Student Loan Lawyer Services
The world of student loans can be confusing and it’s ever-evolving. At Kaplan Law Firm, we can guide you each step of the way, helping you get debt free, stress-free.
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How do I obtain a loan? Is the Biden Administration going to cancel debt? These are just a couple of the common questions we at the Kaplan Law Firm get from students and families, and we’re in the know on all of them.
We at Kaplan Law Firm are dedicated to helping students and families navigate the complex world of student loans. Our team understands the challenges that come with financing higher education and is committed to providing comprehensive solutions that fit your unique needs.
Our Student Loan Debt Settlement Services
Our team plans and consults with students and families to determine the best course of action toward limiting and eliminating debt. In most cases, your federal loan will be eligible for one of four types of income-driven repayment plans provided by the United States Department of Education.
Income driven repayment plans are qualifying payment plans for those seeking forgiveness under public sector loan forgiveness. These are plans that have manageable monthly payments calculated based on your wages or other income and how large your family is. They are the Revised Pay as You Earn Repayment Plan, the Income-Based Repayment Plan, the Income-Contingent Repayment Plan, and the Pay As You Earn Repayment Plan.
Let’s break these down.
- Income-contingent repayment plans allow you to repay your loans based on either 20% of your discretionary income or what you would pay on a repayment plan with a fixed income over a 10 or 20 or 25 year year period adjusted based on your income, and type of loans. You may make payments under this plan if you are a borrower who has eligible federal student loans.
- What are the benefits of Income-Contingent Repayment Plans?
Income-contingent repayment plans offer a flexible and adaptive approach to managing student loan repayment, providing borrowers with several advantages. Firstly, these plans take into account your discretionary income, ensuring that your monthly payments are proportionate to your financial capacity. This means that during periods of lower income, such as when starting a career or facing financial challenges, your repayment amount decreases accordingly, offering temporary relief. Additionally, the option to base payments on what you would pay under a fixed income over a specified period provides predictability and stability.
- An Income-Based Repayment Plan determines a monthly payment at 10% of your discretionary income or 15% of your discretionary income, depending on the timing of your loan. The amount is never greater than a 10-year Standard Repayment Plan Amount and can run for up to 25 years, depending on the type of loans.
- Why Should I Consider an Income-Based Repayment Plan?
This approach ensures that your repayment obligations are directly tied to your ability to pay, providing flexibility during times of financial uncertainty or lower income. Furthermore, the IBR plan sets a cap on monthly payments, ensuring they never exceed the amount under a 10-year Standard Repayment Plan. This feature offers a safety net, preventing borrowers from being burdened with unmanageable payment amounts. While Income-Contingent plans typically consider 20% of discretionary income, IBR plans may require only 10% or 15%. This can make IBR plans particularly appealing for those with relatively lower incomes or higher loan amounts, as it eases the financial strain associated with student loan repayment.
- NEW Biden Administration SAVE Plan – What is it?
The SAVE – the newest income driven repayment plan recently introduced by the Biden administration – will lower student loan payments by 50%! The SAVE plan has a 100% interest subsidy, meaning the whole time you are enrolled in the SAVE plan, you will not pay interest. Need to find out more about the SAVE plan and if you qualify, book a consultation with Kaplan today and together we will pave your financial future.
- Pay-As-You-Earn Repayment Plan requires you to pay 10% of your discretionary income up to the 10-year Standard Repayment Plan Amount. The PAYE Plan extends borrowers a monthly payment calculated at 10% of their discretionary income, with the added benefit of loan forgiveness after a 20-year period. For married borrowers opting to file taxes separately and meeting the eligibility criteria of the plan, the PAYE Plan often emerges as the optimal choice for repayment.
- There is also a revised “Pay as you Earn” or “REPAYE” plan set to arrive in 2024 that will allow borrowers to cut their payments in half and receive a 100% interest rate/subsidy. The REPAYE plan utilizes 10% of your discretionary income and presents the opportunity for loan forgiveness after a span of 20 to 25 years. In the context of marriage, if you and your spouse are still together, your monthly payment is determined based on your spouse’s income, irrespective of your tax filing status, your spouse’s federal loan debt, or whether you share financial responsibilities.