Student Loan Forgiveness

November 19, 2014
To: All FMI Clients
Subject: Student Loan Forgiveness
College graduates are in for a rude awakening, the class of 2013 averaged $35,200 in total college related debt. From government loans and private loans to personal/family loans and credit card debt, college graduates are having a hard time keeping their heads above water after graduation.


There are options for reducing college debt. Loan forgiveness options are available for students entering qualifying work fields and repayment plans are available for those suffering from financial hardship.
Loan Forgiveness
 Teacher Loan Forgiveness: this option benefits teachers that have been teaching full time in a low income elementary or secondary school or educational service agency for five consecutive years. If all requirements are met, as much as $17,500 of the borrowers subsidized or unsubsidized loans can be forgiven.
 Public Service Loan Forgiveness: is available for certain public service jobs and requires 120 payments be made before the remaining balance that is owed can be forgiven. Some payments under certain repayment plans may be counted toward the required 120 payments.
Repayment Plans
 Income Based Repayment Plan: allows borrowers that suffer from a partial financial hardship to make lower monthly payments. If the amount owed is not repaid in full after 25 years of qualifying for monthly payments, any outstanding balance on the loan will be forgiven.
 Pay As You Earn Repayment Plan: requires similar standards as the income based repayment plan but instead of a 25 year time frame the balance of the loan is forgiven after 20 years of qualified payments.
There are pros and cons to repayment plans, lower monthly payments are helpful, but by extending the repayment period you likely pay more in interest. Also, the borrower may be required to pay income tax on any amount that is forgiven.
The above options are just a few of the plans available to help graduates pay for college after graduation. As a recent college graduate Kayla would be pleased to discuss the details with your child or grandchild or you can view all the plans and requirements for each plan at www.ed.gov .
Jack, Mike & Kayla

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