You’ve invested time into your future by earning a professional degree and now it’s time to repay those hefty student loans. There’s no denying the burden of student loan debt; you’re one of nearly 40 million people in the nation with student loans. There’s a lot of student loan myths floating around that can be misleading about repayment options and we are here to set the record straight and get you on your way to financial freedom.
Myth #1: Paying someone to help repay student loans will get you on track.
Don’t fall into the trap of paying someone else to help you repay your student loans. With these services, you are paying for:
– Someone to get paperwork for you that you could get yourself.
– Someone to make phone calls on your behalf.
If your monthly payment seems daunting, call your student loan provider and find out your options. Our loan calculator can also be a quick tool to help figure out your repayment plan.
Myth #2: You are locked into the Standard Repayment Plan.
Borrowers are automatically entered in the Standard Repayment Plan (10-year repayment plan), but if that doesn’t suit your budget you’re not stuck. It’s a tough job market and a repayment plan like this could be too much to take on. You’ve got options for repayment; do your research and see what your loan provider has to offer.
Myth #3: Student loans will eventually go away.
Understand that student loans CANNOT get discharged in bankruptcy. You have to repay them because they aren’t going anywhere. Luckily there are programs designed to eliminate your student loan debt. Also, the amount of student loan forgiveness is NOT treated as taxable income.
– If you opt to serve in the Peace Corps, Americorps, or Volunteers in Service to America (VISTA) you are eligible to receive money to be used toward your student loans or you can get automatic deferment on your Stafford or Perkins Loans.
– Each year, 15% of your student loan debt will be paid up to the branch maximum.
– Army = $65,000
– Army Reserve = $20,000
– Navy = $65,000
– Air Force = $10,000
– If you teach in areas that serve low-income families, you are eligible for student loan forgiveness as a teacher with your Perkins Loan. A portion of your student is forgiven each year up to your fifth year of teaching.
– Many law schools forgive student loans to graduates who serve in public interest or for non-profits. The American Bar Association also offers loan repayment for legal studies.
– A number of national programs offer student loan forgiveness or money to be used towards your student loans in exchange for service in needed areas.
Every college offers different types of loan forgiveness, so it is important to research your options! Before paying off your student loans, understand what you’re paying for and remember that there are ways to have your loans forgiven.