Essay On Student Loans
The story of student loan debt isn’t too often told. As a matter of fact, the story isn’t told at all and hardly ever treated with a sense of urgency. Most people with student loans try their hardest to forget them while in school; since it has the ability to make the entire college experience kind of unpleasant when you think about the massive price tag you’re paying.
But as you get closer to graduation, the thought will come back sooner or later. “I’ll need to start paying my loans off.” The bad news is, if you don’t have a full time job lined up after receiving your degree, the thought of paying your loans back can be downright terrifying.
Thankfully for students with federal loans - and a few private ones - there exist something called …show more content…
When it comes to government loans, many people stick with “standard” repayment plan. This default payment, however, requires borrowers to make a fixed monthly payment for up to 10 years - an approach that can help minimize the interest rate, but will maximize the monthly payments.
The good news is, government loans also offer the possibility of loan forgiveness after a set number of years of on-time repayment from 10 to 25 years. It all depends on the plan selected and the borrower’s profession. But those who benefit the most from these plans typically have debt in excess of their income.
Defaulting on the loans. The federal government has very strong powers when it comes to getting their money back that may include administrative wage garnish, offset of federal and state income tax refunds, social security retirement and disability benefit payments. There is no reason a borrower should choose a default payment plan, since the default plan is normally higher than the monthly loan payment under income-based repayment or pay-as-you-earn repayment.
In this case, the borrower will also have to pay collection charges up to 20 percent of each payment. To put it another way, there is no getting away from debt and no financial benefit to defaulting and taking on a loan plan you can’t
But as you get closer to graduation, the thought will come back sooner or later. “I’ll need to start paying my loans off.” The bad news is, if you don’t have a full time job lined up after receiving your degree, the thought of paying your loans back can be downright terrifying.
Thankfully for students with federal loans - and a few private ones - there exist something called …show more content…
When it comes to government loans, many people stick with “standard” repayment plan. This default payment, however, requires borrowers to make a fixed monthly payment for up to 10 years - an approach that can help minimize the interest rate, but will maximize the monthly payments.
The good news is, government loans also offer the possibility of loan forgiveness after a set number of years of on-time repayment from 10 to 25 years. It all depends on the plan selected and the borrower’s profession. But those who benefit the most from these plans typically have debt in excess of their income.
Defaulting on the loans. The federal government has very strong powers when it comes to getting their money back that may include administrative wage garnish, offset of federal and state income tax refunds, social security retirement and disability benefit payments. There is no reason a borrower should choose a default payment plan, since the default plan is normally higher than the monthly loan payment under income-based repayment or pay-as-you-earn repayment.
In this case, the borrower will also have to pay collection charges up to 20 percent of each payment. To put it another way, there is no getting away from debt and no financial benefit to defaulting and taking on a loan plan you can’t