Thursday, October 27, 2011


Obama's Student Loan Plan--What a Joke!
I typically zone out on most things involving the president but his newest plan about reducing student loan payments is hardly original and hardly worthy of praise. FYI to the president and people struggling with student loans (if they're in default): First of all, there are deferrements.

Secondly, there is the possibility of consolidating federal student loans through the William D. Ford Direct Loan program. It's a great program to consolidate student loans. Consolidating loans typically reduces the monthly payments.

Thirdly, there is also the option of getting an income contingent repayment plan (again, for federal loans that are in default). Payments can be as low as $5 a month and are discharged if they're not repaid in 25-years. I believe you have to provide income verification for this option.

Lastly:  Federal student loans can be entirely forgiven if someone is disabled. It's as simple as downloading a medical form and having a doctor fill out some questions. The Department of Education decides if you're disabled based on the medical information.

Obama is trying to reinvent the wheel.

A little note on being in default on federal student loans--be careful! Unlike other loans, you can't escape responsibility by filing for bankruptcy, your pay can be garnished, and they can even take money out of your Social Security Disability Insurance (SSDI) or (I'm not 100-percent positive if this applies to pensions) .

So it is best not to blow off student loans that are in default or that you're struggling to repay loans. I don't believe Supplemental Security Income (SSI) can't be touched.

If you're having trouble repaying student loans, check with the US Department of Education and/or the federal William D. Ford Direct Loan repayment program.

Obama doesn't deserve applause for his student loan reforms. He is indeed trying to reinvent the wheel.



 
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