We may be able to apply for or negotiate an income-driven repayment plan so that you can make federal and private student loan repayments that you can afford. Your credit will remain solid if you successfully move through this process.
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. These are plans that have manageable monthly payments calculated based on your wages or 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.
The Revised Pay as You Earn Repayment Plan generally sets a monthly payment at 10% of your discretionary income. Any borrower who has eligible federal student loans may use this plan.
An Income-Contingent Repayment Plan allows 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 12-year period adjusted based on your income, whichever is less. You may make payments under this plan if you are a borrower who has eligible federal student loans.
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.
A Pay as You Earn Repayment Plan requires you to pay 10% of your discretionary income up to the 10-year Standard Repayment Plan Amount. However, there is an eligibility requirement that you will need to meet for this type of plan or an Income-Based Repayment Plan. The payment that you need to make based on income and family size needs to be less than what you would pay under a Standard Repayment Plan with a 10-year repayment period. Usually, people meet this requirement when their federal student loan debt is greater than their discretionary income or makes up a sizeable portion of it. Student loan attorney Rae Kaplan can advise Chicago residents on whether this plan or another option is appropriate for them.
Under all four plans, your remaining loan balance will be forgiven if your loan is not fully repaid by the conclusion of the repayment period. Any period of economic hardship deferment or period of repayment under specific other repayment plans may go toward meeting the repayment period. In some cases, income may rise, and someone may be able to fully repay a loan prior to the repayment period. In other cases, a debtor may have a very small income relative to their debt.
The Public Service Loan Forgiveness (PSLF) Program forgives the balance left on direct loans but only after you have made 120 monthly payments under an approved plan while working full-time for certain employers. It works in connection with an income-based repayment plan, reducing the forgiveness period for people working in public service. Using this option, you may be able to make payments as low as $50 per month. This may apply to you, for example, if you work at a 501(c)(3) nonprofit or you are in the public sector as a teacher, fireman, police officer, nurse, or doctor. Your credit will stay intact, and you will not be in default if you go through this process.Parent Plus Student Loans
Don't let Parent Plus student loans (or any other type of student loan for that matter), ruin your day! Kaplan Law Firm can get your student loans under control and advise you on whether you are eligible to completely discharge or eliminate your student loan debt. Many of our clients are currently in $0 per month repayment plans, while rebuilding their credit!Consult an Experienced Student Loan Lawyer in the Chicago Area
To apply for an income-driven repayment plan related to a federal student loan, you will need to submit an application that provides income information. It may be possible to negotiate a payment plan based on your income for a private loan. If you are looking for solutions to your student loan debt, we may be able to provide both bankruptcy and non-bankruptcy options. Chicago student loan attorney Rae Kaplan represents people throughout Cook, Kane, Will, DuPage, and Lake Counties. Call us at (312) 294-8989 or use our online form to set up an appointment with a consumer rights lawyer.