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Student Loans – A New Hope

We can’t deny that there are a number of college graduates these days who face great problems on their student loans. There are so many college borrowers actually who have called for debt relief but former president Barack Obama proposed for faster government student loans as well as loan forgiveness plans to be able to help borrowers repay debts and boost American economy at the same time.

The decision of former president to expand the education loan forgiveness to greater number of students might mean that the loans you took out to pay your education will now be easier to handle. As a matter of fact, the main objective of this particular plan is to make loan consolidation at lower rate of interest which offers 3 major features that are known to benefit struggling college graduates to pay their loans.

Repayment term – every loan that has to be consolidated will retain its initial repayment terms and for that, borrowers are going to pay lower interests over the course of the loan.

Interest rate – after applying for .25 percent interest reduction to the qualifying loans being consolidated, there is going to be a fixed rate that won’t exceed 8.25 percent. The lower rates also means that there is going to be more monthly payment for the principal balance.

Electronic debit payment benefit – when it comes to those who used the consolidation plan, they are entitled for an additional .25 percent interest reduction if their educational loan is paid through Department of Education’s automatic debit system.

Apart from that, the government is convincing those people who have government and private loans for students to be allowed to consolidate their debts into new government loan. Since the federal government will speed up the rollout of income-based program, such move can drastically slash the rate of interest and also, save money throughout the process. On the other hand, college graduates are still responsible in keeping to make payments onto their loans but the revised payments would now be capped at 10 percent of their income.

The best of this is that, for all those who have borrowed tens of thousands of dollars in an effort to finance their education, their loans will be forgiven after twenty years. This new law is estimated to help college students ranging from 450000 to 6000000.

With this in mind, if you have some problems with your student loans and would like financing for such, it is going to be a good idea to look for student loans company and apply for one. By doing so, you can pay your debts later when working and get a degree.