How $300,000 in student loans changed the course of my life.
Senators urge Biden administration to simplify military student loan forgiveness program
Prominent Democrats want to make it easier for military borrowers to qualify for a loan discharge
A group of prominent Democratic lawmakers are calling on the Biden administration to make it easier for military personnel to have their federal student loans forgiven.
In a Nov. 17 letter addressed to Education Secretary Miguel Cardona, 14 senators urged the Department of Education to offer student debt relief for military service members under the recently-overhauled Public Service Loan Forgiveness program (PSLF). The letter is signed by progressives like Elizabeth Warren, Bernie Sanders and Amy Klobuchar.
About 200,000 military members owe more than $2.9 billion in student loan debt, the letter stated. Yet 94% of service members and civilian employees of the Department of Defense (DOD) who previously applied for the PSLF program have been denied, it continued, citing a report from the Government Accountability Office.
Keep reading to learn more about student loan forgiveness for military service members and consider the alternative debt repayment options like refinancing. You can compare student loan refinance rates on Credible for free without impacting your credit score.
waht is Student loan ?
A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses.
It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy. This article highlights the differences of the student loan system in several major countries.
Student loan payment pause ends next month: What to know
Will I be notified?
Not everyone’s payment is due on Jan. 31. You’ll get a billing statement or other notice at least 21 days before the payment is due.
Will the payments still be 0% interest?
Despite some efforts by Democrats to continue the 0% interest for loans once repayment resumes, there are no plans by the Biden administration.
Will my autopayment restart?
Your automatic debit payments may not restart when the payments begin again. Check with your loan servicer to confirm you’re still enrolled.
Can I lower my payments?
If you’re worried about being able to afford the payments, the Department of Education recommends contacting it immediately. You can apply for a different payment plan based on income. The application requires information on employment, family size, marital status and income.
What are the 4 types of student loans?
Understanding the Types of Federal Student Loans
It helps to know the key terms and benefits of various federal loans before borrowing for college or graduate school.
Student Loan Ranger
Student Loan Ranger helps prospective and current students and recent graduates make sense of borrowing options, student debt and loan repayment. The blog is currently authored by Education Finance Council, a national trade association representing nonprofit and state-based higher education finance organizations; GreenPath Financial Wellness, a national nonprofit organization that provides financial counseling and education to empower people to lead financially healthy lives; and The Institute for College Access & Success, an independent nonprofit organization that conducts research, analysis and advocacy on making higher education more available, affordable and equitable. Previous blog contributors include the Financial Counseling Association of America, National Foundation for Credit Counseling and American Student Assistance.
four types of federal student loans
Direct Subsidized Loans
Direct subsidized loans are available to eligible undergraduate students with demonstrated financial need. Your financial need is determined using a formula with the information provided on the FAFSA.
If you qualify, this loan has slightly better terms that other federal loans because the federal government will cover the interest during certain periods, including while you are enrolled in school at least half time, during the six-month grace period after you leave school and during periods of deferment.
Direct Unsubsidized Loans
Direct unsubsidized loans are similar to subsidized loans with some key differences. Most significantly, the unsubsidized loan borrower is responsible for the interest that accrues during all periods, even when the loan is not in active repayment. Also, unsubsidized loans are available to both undergraduate and graduate students, and eligibility is not based on financial need.
Direct PLUS Loans
Direct PLUS loans are made to either graduate or professional students, known as the Grad PLUS loan, or parents of dependent undergraduate students, known as the Parent PLUS loan. These loans are meant to fill a gap between the cost of attendance and available resources if you still need money to pay for your education after borrowing your maximum limit of unsubsidized and subsidized loans.
Direct Consolidation Loans
Consolidation loans are a bit different than other types of federal loans. They allow borrowers to combine all eligible federal student loans into a single loan – which is usually done after leaving school – without an application fee.
What GPA is required for student loans?
Losing Financial Aid for Unsatisfactory Academic Progress
Find out why getting Cs and Ds could lead to a loss of financial aid.
Some students in college have found out the hard way that getting good grades literally pays. In the world of higher education, academics and financial aid go hand-in-hand. One must keep their grades satisfactory in order to maintain their financial aid package.
Satisfactory versus Unsatisfactory Grades
To be eligible for federal student aid and college financial aid, a student must be making Satisfactory Academic Progress (SAP). This generally consists of maintaining at least a 2.0 GPA on a 4.0 scale (i.e., at least a C average) and passing enough classes with progress toward a degree. About one in ten college students will have a cumulative GPA that is less than 2.0 on a 4.0 scale.
Implications of Unsatisfactory Academic Progress (i.e., Bad Grades)
If a student loses financial aid for a failure to maintain satisfactory academic progress, the student may be able to regain eligibility by getting better grades. Until then, however, the student will be ineligible for financial aid and will have to pay for the college costs on his or her own.
Exceptions to the Rule
In some cases a student may be able to appeal for a temporary waiver of the satisfactory academic progress rules. These circumstances include when the failure to make satisfactory academic progress was due to injury or illness of the student, death of a relative of the student, or other special circumstances.
What You Should Know Before Going to College
It is a good idea to start by reading the college’s satisfactory academic progress policy, which can be found on the college’s website or course catalog. The college’s financial aid office can also provide a copy of the policy upon request.
It’s also important for students to know the best practices of their school before they begin classes. For instance, at a larger school, attendance is rarely taken. However, at smaller schools, attendance is not only taken each meeting; it’s part of the letter grade. It doesn’t matter how well a student performs on tests or essays, if he or she is rarely in class, it will bring their grade – and their GPA – down.
Being prepared with what your school expects of you ahead of time will lessen the chances of you falling below unsatisfactory academic progress and losing financial aid or scholarships. So far as you can help it, work hard to keep your academic standing and attendance within the acceptable range.
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