Few Options Available To Help Pay Off Private Student Loans
from USA Today
President Barack Obama announced in October a broad initiative to provide relief for college graduates struggling to repay student loans. Obama said the plan will lower monthly payments for 1.6 million borrowers. The sluggish economy has made the differences between federal and private loans even more pronounced. For example, federal student loan borrowers who are unemployed are entitled to defer payments on their loans for up to three years. Borrowers earning less than they had been expected to can apply for a reduction in payments, based on their discretionary income. After 25 years of making qualified income-based repayments, the balance of the loan is forgiven, even if it hasn't been fully paid off. The Obama administration's plan would forgive the loan balance after 20 years. For private lenders, such relief is voluntary — and rare.
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