In June we mentioned new federal programs that could help students unload, or at least manage, a bit of the student debt they incurred during their undergrad and law school years.
If you'll recall, the program, which took effect July 1, gave some borrowers access to an income-based repayment plan. Under the new program, whatever debt is not paid back after 25 years is forgiven, and the period is even shorter, 10 years, for those who go into public service.
But we didn't mention one teensie little catch to that whole "forgiveness" thing.
Truth is, even if your loan is forgiven after those 25 years, the amount forgiven would be taxed as income to the borrower, according to an email sent out by the Project on Student Debt.
As a possible solution, H.R. 2492 was introduced in May. The bill, which looks like it's still set to be reviewed by the House Ways and Means Committee, would amend the Internal Revenue Code of 1986 to keep the forgiven amount from being reported as income. This would only apply to borrowers whose repayment plans were income contingent or income based.
Find out more about the bill at the Project on Student Debt, which allows you to fill out and print a form letter that you can send to your representative to urge them to show their support if you are so inclined.
You can track the bill's progress here.
the program, which took effect July 1, gave some borrowers access to an income-based repayment plan. Under the new program, whatever debt is not paid back after 25 years is forgiven, and the period is even shorter, 10 years, for those who go into public service.
But we didn't mention one teensie little catch to that
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Posted by: Account Deleted | March 18, 2011 at 03:26 AM
Student loan debt which is considered recovered about million is classified as a collection" which includes a renewed loans. The Department of Education loan program for rehabilitation of student borrowers who have defaulted on their federal loans for education rehabilitate" the loans setting back the loans in good standing with the nine-time full payment of the agreed during the period of 10 months.
Posted by: Spara pengar | July 11, 2011 at 02:57 AM
In the uk atm they are about to stop some benefits that people are on who are studying at college. My wife is one of these effected and is hoping to attend university next year, to cover the fees for this year at college though we might have to use a company like http://www.link-market.co.uk/index.php/products/1-latest-news/187-paydaybank to cover the shortfall. luckily she will be able to get a student loan at university though
Posted by: steve "always skint" summerfield | September 25, 2011 at 12:35 AM
In the UK we have had an income based repayment system for some time and it works well. Students do not have to repay their loans until they reach a certain level of income and then repayments are collected through the inland revenue service along with income taxes. The rates of interest are very low, the money is loaned by the government. Student loans are one of the very few things to do with education that the British government actually got right!
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Posted by: Get Money Now | September 27, 2011 at 03:59 PM
It's just horrible how I went to school for four years thinking I would have no problem with paying back my student loans, only to be working one part time job now. There needs to be some kind of help for us. We did what we were told to do : go to school! Now we are in worse positoin than before we started going to school. If they can't be forgiven, hopefully the interest rates can be lowered, or something along those lines of helping out.
Posted by: cash loans | December 22, 2011 at 10:42 AM