This week, Craig Siminski, of CMS Retirement Income Planning, shares an article outlining the basic provisions of income-driven repayment plans that can help reduce the burden of federal student loans:
Although student loans are usually associated with young people, about 23% of the $1.5 trillion total student loan debt in the United States is owed by people ages 50 and older — and many of these loans are in serious delinquency (90+ days late).
Older Americans may be carrying loans for their own education, or they may have taken out or co-signed loans for their children or grandchildren.
Due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent executive action, federal student loan payments and interest have been suspended through December 31, 2020. If you or a child carry a federal student loan and anticipate having difficulty restarting payments in 2021, an income-driven repayment plan could ease the burden.
Payments You Can Afford
The federal government offers four income-driven plans: Pay As You Earn, Revised Pay As You Earn, Income-Based Repayment, and Income-Contingent Repayment.
Eligibility and terms of these plans depend on the origination date of the loan and whether it was for undergraduate or graduate education. All four plans are open to borrowers with federal Direct Loans (subsidized or unsubsidized), Graduate PLUS Loans, and Consolidation Loans. Parent PLUS loans are eligible only for…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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