New payment option for student loans | The Frugalista

New payment option for student loans

by frugalista on June 29, 2009

On July 1, a new student loan repayment option is available for those who owe money for their college education. The new program, Income-Based Repayment, will allow you to cap your repayments to 15 percent of your gross income. 

Some things to consider before signing up:

*You may end up paying more interest under the new program but your payments may be lower. 
 *If your income goes up, your monthly payments increase.
*After 25 years of paying the 15 percent amount, the loan balance would be forgiven. However, you may have to pay taxes on the amount that is forgiven.
Would you consider this program for paying off your student loans? What do you think?

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