Does Student Loan Forgiveness work? Well, that’s a loaded question with different angles to be covered. We here at Student Debt Relief see Loan Forgiveness working for our clients on a daily basis. It’s a program that is really helping those in need of help, but it’s not easily taken advantage of due to the complicated application process. The program is designed to assist those with a low income when their loans have become unmanageable, along with forgiving or providing a principle reduction to others who have decided to enter into a field the government feels is a great help to the United States of America on the whole. There are different repayment options available to borrowers depending on their needs. It also assists those who are higher earners because it allows them to consolidate their loans into one reduced payment, and also protects them against job loss. Under a normal loan repayment with your payment being based upon the loan size, if you are working or not is irrelevant to your payment. This pay-as-you-earn system acts as a free insurance policy to everyone.
Is it fair?
It’s certainly fair for those in need. It is fair for those who have Federal Student Loans and are unable to find work to no fault of their own. It is fair for those who are disabled and need forgiveness of their student loans. Its also fair for those who have multiple dependents and are trying to provide for them working in an industry that does no provide a high income. The Income Based Repayment calculates borrowers Student Loan monthly payment based of their Adjusted Gross Income rather than the loan size, which means the payment will always be manageable rather than having a monthly payment based upon your loan size.
Is it ever not fair?
Some would argue it’s not fair when two people have the same Federal Student Loan balance, one has to fully pay off his loan and the other is simply forgiven at the end of the term for not earning enough to pay it off. Another argument is the fact that these programs only inflate the cost of education by making it easier to borrow without consequence. This is where the true problem lies in my opinion, the economics of the Student Loan Forgiveness Act which I will visit in another article.
Well what should I do?
Like most things in life, you should take advantage of what is offered to you. This program does in fact help many people. On a daily basis we have people on the phone with us who are in tears, not expecting us to be able to help them as much as we are able to. This is a great feeling knowing that while someones financial situation may be very difficult, you are able to provide them with a service that can drastically help them to the point that they want to hug you over the phone. The Student Loan Forgiveness Act was put in place to help alleviate the burden of Federal Student Loans. If you need assistance then you should consider enrolling into the program.