The President believes the federal government can assist college graduates with managing their student loan debt. He has proposed a "Pay As You Earn" loan foregiveness plan. Under his plan, in 2014 borrowers will be able to reduce their monthly student loan payments to 10 percent of their discretionary income. As a result, these graduates could spend money on homes and cars, rather than suffer under the heavy burden of student loan debt. At least one congressional member, John Kline, criticized the plan as "very confusing." In addition, he believes the proposal would costs taxpayers more, but others claim that if the proposal is not instituted then graduates are at a greater risk of default. Let us know if you find a specific benefit for veterans in the President's proposed plan.
Student loan forgiveness could make a big difference in your ability to transition into civilian life. If you are an active duty service member or veteran then you should know about the available loan forgiveness programs from organizations, schools, and the government. States have offered repayment assistance in past years, but funding is much tighter due to the economy. It is important to perform this research sooner rather than later because some programs require a particular lender or repayment provider.
One such program is the Public Service Loan Forgiveness (PSLF) program. PLSF was created to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, you may qualify for forgiveness of the remaining loan balance due on your eligible federal student loans after you make 120 payments under certain repayment plans. Non-defaulted loans made under the William D. Ford Direct Loan Program are eligible for loan forgiveness. However, you can consolidate your loans and transfer the loans to the Direct Loan Program. Your years of active duty military service will qualify if you are already in the program. If you leave the military before accumulating enough qualifying years, in the event you continue to work for the government or a nonprofit, you will likely be able to count these years towards the requirement.
A little research can go a long way towards getting repayment assistance from your alma mater or professional organization. For medical school graduates, the National Health Service Corps (NHSC) has a program to repay some of a student's debt in return for contracted service in a geographic shortage area. Under the Loan Repayment Assistance Program (LRAP), a UNC law school graduate can receive loan repayment assistance. Before you make the decision on your school, also research whether you are eligible for in state status and lower tuition. In some states, a family member's full-time work might qualify you to become immediately available for in state status. Your prospective school's financial aid office is likely aware of the exceptions to in state status and it should be your first point of contact.
If you are a veteran left with student loans unpaid by the military, Leave No Veteran Behind might be able to assist you with repayment. For more information on whether you qualify for loan forgiveness, visit their website at http://www.leavenoveteranbehind.org/.
Money is more difficult to find these days, but it is available as long as you are willing to continue work in public service. For additional programs and scholarships, visit http://www.va.gov/jobs/hiring_programs.