Here Are Some Student Loan Relief Options

Most college students leave with a substantial amount of debt. According to the Federal Reserve, adults in 2019 who had college debt owed between $20,000 and $24,999. For those struggling with student debt, student loan relief options can sound like a dream come true. However, these programs are only available for federal student loans, not private ones, and the qualification requirements can be rigorous.

What Is Student Loan Relief?

The U.S. Department of Education offers several forgiveness and discharge programs for federal student loans. You may qualify to have some or all of your loans forgiven or discharged in certain situations. While the terms student loan forgiveness or cancellation and loan discharge are often used interchangeably, they’re very different from one another. You may qualify for student loan relief options, based on your qualifications, such as your career path. You may even be eligible for loan discharge based on circumstances beyond your control, such as becoming totally and permanently disabled.

Student Loan Relief Options

With student loan forgiveness programs, you typically make payments for a set period. After you meet the forgiveness programs’ requirements, the remaining loan balance is cancelled.

1. Income-Driven Repayment Forgiveness

Income-driven repayment (IDR) plan forgiveness is a good option if you cannot afford your payments under a 10-year standard repayment plan. With this approach, you enter into an IDR plan, which bases your monthly payment on your family size and disposable income. Depending on your situation, you could qualify for a much lower monthly payment than you’re making now. Your repayment term may be 20 or 25 years, depending on what plan you choose. If you still have a balance at the end of your repayment period, the remaining amount is forgiven. However, the cancelled loan amount may be taxable as income.

You can apply for an IDR plan online or by contacting your loan servicer. To be eligible for the IDR plan student loan relief options, you must qualify for one of the following IDR plans and have a balance after making payments for the full repayment term:

2. Perkins Loan Cancellation and Discharge

If you have Perkins loans, the last of which were issued in 2018 and work in public service. You may be eligible for partial or full loan student loan relief options. Depending on your position, you could have up to 100% of your loans forgiven within five years. To apply for Perkins loan cancellation, you must contact the school that made the loan.

3. Public Service Loan Forgiveness

Under Public Service Loan Forgiveness (PSLF), some federal loan borrowers can have their loans forgiven after 120 monthly loan payments. To qualify, you must work for an eligible non-profit organization or government agency full-time while making 120 monthly qualifying payments. Payments made under an IDR plan count as qualifying payments for PSLF. The loan balance forgiven through PSLF is not taxable as income. You can use the PSLF Help Tool to find out if your employment and loans qualify for forgiveness.

4. Teacher Loan Forgiveness

With the Teacher Loan Forgiveness Program, you can qualify for up to $17,500 in loan forgiveness if you teach full-time for five full and consecutive academic years in a low-income elementary or secondary school or educational agency.

Eligibility For Borrowers Based On The Type Of Loan:

  • Federal direct unsubsidized (alternatively referred to as unsubsidized Stafford loans)
  • Federal direct subsidized (alternatively referred to as subsidized Stafford loans)

Only teachers of certain subjects, such as mathematics or science, are eligible for the full $17,500 of forgiveness. Teachers of other subjects may qualify for $5,000 of forgiveness instead. To apply, submit the Teacher Loan Forgiveness Application to your loan servicer after completing five years of service.

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Federal Student Loan Forgiveness And Private Student Loan Relief Options

U.S. Department of Education Resources: Student Aid On The Web 

  1. Income-Based Repayment Plan

Information on the IBR Plan for federal student loans, including eligibility requirements and an IBR payment calculator. 

  1. Public Service Loan Forgiveness Program

Details on the Public Service Loan Forgiveness program, which forgives federal loans after ten years of eligible employment and eligible payments.

  1. Pay as You Earn Repayment Plan

If your student loan debt is high relative to your income, you may qualify for the Pay As You Earn Repayment Plan. Most Direct Loans (except for Direct PLUS Loans for parents and Direct Consolidation Loans that repaid PLUS loans for parents) are eligible for Pay As You Earn.

National Consumer Law Center: Loan Repayment Assistance Programs (LRAPs)

  1. Law School-Based

LRAPs are offered to graduates from over 100 law schools. Eligibility for most, but not all, of these programs is based on the level of your income and public interest employment.

  1. Statewide Loan Repayment Assistance Programs (LRAPs)

LRAPs from states that provide repayment assistance to public interest attorneys. Eligibility and assistance levels vary.

  1. Repayment Assistance for Federal Employees

Repayment assistance for federally insured loans to employees of some federal loan services.

  1. Additional Options for Government and Non-Profit Employees

Military service, AmeriCorps service, and other public service programs provide specific assistance with educational debt.

  1. Lowering the Stakes: How Law Schools Can Help Next Gen Lawyers Take Gamble Out of Hefty Tuition

In this audio program, ABA Journal Podcast moderator chats with our guests about tuition, disclosure and what could and should change about legal education to train the next generation of lawyers without saddling them with crushing debt

PS: If there’s anything more you’d like us to know about. Add it to the comments section!

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Tips To Cope With Your Student Loan Stress

If you are just out of college and living on a limited budget, paying off your student loans can be very stressful. Debt related stress can feel very overwhelming at times, but with some planning, you can stay on top of that stress and make progress towards paying down your debt. Before we get into tips to cope with your student loan stress, let’s talk about the causes of student loan stress:

Student Loans and Mental Health

Financial Pressure Creates An Environment For Mental Health Issues

Two factors that create financial and emotional stress on young adults. First, many young people have a poor understanding of the long-term effects of financial decisions like a student loan. Hence, they tend to take greater risks in their finances than any other age group. Second, over a third of college freshmen suffer from at least one mental health problem. Many of those suffering from mental health problems have experienced its effects right from their school days.

In addition to the responsibilities of job and family, college students facing student loan payments, have an emotional and psychological attack. While budgeting can immediately help put a student back in control, cost-saving measures applied to monthly expenses can help relieve financial pressure and stress. Financial satisfaction is an important component of life satisfaction, and it is closely related to one’s overall psychological well-being.

Anxiety

Anxiety is a natural reaction to stressful situations. Our bodies inflame to provide higher levels of focus to meet a challenge, whether it be a college test or job interview. However, an abnormal level of anxiety, or anxiety that persists long after the immediate challenge has passed, is an unhealthy state and constitutes a mental health issue. Sustained anxiety is a major cause of social phobias and panic disorders. For some people, anxiety becomes the norm, in what is known clinically as a Generalized Anxiety Disorder (GAD). 

Nearly one in three U.S. households currently live with student loan debt. Financial stress is often a contributing factor to anxiety. When an individual has recurring anxiety related to finances (often the case with student loans) it can lead to an emotional and mental environment that leads to depression and other health issues.

Anxiety and stress rank highest among mental health complaints of college students. A study by the American College Health Association (ACHA) of college students found that stress and anxiety were the top non-academic factors determining a student’s academic success. Students in the study reported periods of feeling overwhelmed and exhausted, both of which are linked to anxiety. Students described their symptoms as damaged memory and an inability to process one’s thoughts. On the emotional side, students compared the inability to relax and have a good time and a tendency to procrastinate to more serious emotional problems like depression. Physical symptoms associated with anxiety include rapid heartbeat, nausea, and dizziness. This can be curbed with a few tips to cope with your student loan stress.

Although anxiety is generally associated with personal, social or financial triggers, factors in one’s environment can also play a part. Lack of sleep or disturbed sleep patterns, diet, neurochemical imbalances, and chemical pollutants in the atmosphere can also factor as triggers or accelerators of anxiety. Coping with anxiety is not a very easy task, here are some tips to cope with your student loan stress.

We’ll help plan your finances for education. Contact us by filling the form on this page!

Four Tips to Reduce Student Loan Debt Stress

  1. Settle Your Monthly Payments

 One of the best tips to cope with your student loan stress is deciding on how much you will be able to pay every month. If your budget is being eaten up by your student loans, you may want to renegotiate the amount of money you pay each month. This won’t be an option for every loan, but it’s worth asking your loan provider if you can lower your monthly payment amount slightly. Yes, it will take longer to pay the loan off, but it also means that you’ll be able to manage a more realistic budget each month. If your income increases in the future, you can increase your monthly payment amount to the bank.

  1. Debt Forgiveness

Depending on what type of loans you have and what type of work you do, you may be eligible for some form of student loan forgiveness. If you have federal student loans, you can qualify for student loan forgiveness by going into certain public service professions, such as teaching. It’s worth checking to see if you fit the criteria for student loan forgiveness, as it can significantly lower the amount of money you pay in the long run. 

  1. Don’t Hold Back Too Much

While applying these tips to cope with your student loan stress, don’t cancel out on having fun. When you feel like you’re drowning in debt, it can seem like the only solution is to cut out expenses for ‘fun’ activities. And while it’s important to cut back, you shouldn’t completely cut out the things that make you happy. If you love to go out to eat with friends and you completely stop, you might start feeling more stressed. Instead, look for an affordable substitute to party, like having a dinner party at home or going to an affordable happy hour instead of a trendy new restaurant.

  1. Ways To Unwind If You’re Stressed About Student Loans

There are many other ways on how to reduce student loan stress or stress in general. For example:

  • Try breathing exercises for relaxation.
  • Soak in a warm bath.
  • Listen to soothing music.
  • Practice mindful meditation.
  • Write.
  • Use guided imagery.

PS: If there’s anything more you’d like us to know about. Add it to the comments section!

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What Are Variable Rate Student Loans?

Often, private money lenders offer a scheme of variable rate student loans to loan borrowers who are taking on a new education loan or refinancing their existing loan. These loans, unlike fixed-rate loans which stay the same till repayment, fluctuate over the course of time. 

Since variable rate loans have a tendency to keep changing or fluctuating, they pose a higher risk than fixed loans. However, they also have the scope of saving you hundreds or thousands of dollars in interest.  Whenever you take out a new student loan or set out to refinance your old one, you will be given the option to choose between variable rate student loans and fixed-rate student loans. 

What Are Variable Rate Student Loans? 

How do variable rate student loans work? A variable rate loan is defined by how its interest rates are determined or set. Only private student loans have variable interest rates as all federal student loans come with a fixed interest rate. 

A variable interest loan implies that the interest rate charged on the loan will change and vary over time. If the interest rate changes, your monthly repayment plan can happen to fluctuate too. 

These changing interest rates are not determined by the will or whims of your lender but instead it is the prevailing market conditions in the finance market that determine the variable interest rate. 

Most often, private loan lenders set and increase or change variable rates in direct proportion with the London Interbank Offered Rate (LIBOR). This rate is the average of the rates prevailing in the loans exchanged between banks or financial institutions themselves.

A variable interest rate loan varies from the fixed-rate loan because it can either increase or decrease during the course of the repayment period. It is made up of 2 parts- a fixed margin and a variable interest rate index.

If you are an Indian student who needs help with student loans, all you have to do is fill the form in this blog.

Fixed Margin

The fixed margin is the only part of variable rate student loans that do not vary over time. It is based on the lender’s analysis of your capacity to repay the loan. How does this work? When you are applying for a private student loan, the lender will analyze the creditworthiness of you and your co-signer. While a variety of methods are used for this analysis, a general rule usually used is if you have a higher credit score, you may get a lower fixed margin.

Variable Interest Rate Index

The second component of a variable interest rate loan is the interest loan index that makes the loan “variable” in nature.  The variable interest index is based on a predetermined benchmark that decides the question of how do variable rate loans work? The lender can decide which index to use but they cannot control its use. The most commonly used index is the LIBOR index that we mentioned earlier. As this index rate changes, so does the index part of your variable interest rate. The fixed margin plus the variable interest rate index make up the total amount of interest rate that you are charged with. 

Why You Should Opt For Variable Rate Student Loans 

Very often, variable interest loans start with a lower monthly payment and can thus save you a lot of money immediately in the short term. 

If you are seeking a new education loan or refinancing your old student loan, here are some of the reasons to watch out for variable rate student loans-

  • If you anticipate that the interest rate will remain low for a while
  • You are seeking cheap initial repayments- one of the main reasons to watch out for variable rate student loans.
  • You are opting for a short repayment period 
  • You are going back to college and want to refinance your old private student loans. 

We hope you enjoyed this blog on What Are Variable Rate Student Loans? To know more about related fields, do check out our other blogs. 

Ways To Cleverly Finance Your Final Semester In College

It happens a lot of times. The aid that helped you with your finance last year is not available this year or you don’t know how to finance your final semester in college. For many students, when they receive the financial aid for the next semester, there is a difference between the tuition now and the budget you have. Here, you don’t have to set your educational goals and process back by taking off a semester.

Remember that using your money wisely is a responsibility that comes with college. It all changes when you are on your own. Here you have the freedom to decide but at the same time, you need to be compliant towards your actions. And above all, you experience the consequences of your own judgments, whether good or bad.

4 Ways You Can Cleverly Finance Your Final Semester In College 

1. Merit-Based Or Private Scholarships

Even though many scholarships are available only once a year, don’t miss the ones that are available year-round. Many scholarships give out aid several times a year. Some scholarships are entirely merit-based, depending on your academic excellence and other merits like sports and extracurricular activities. 

Then there are also need-based scholarships which aim to help the students who are needful and lack funds to achieve their goals. If you belong to a lower income group and need an endowment to help you with your final semester, then look out for such scholarships. You can also apply for outside scholarships about which your school’s financial aid office will guide you and find a way to finance your last semester in college. 

2. High Paying Part-Time Jobs

Believe it or not but it is possible to find a high-paying part-time job while you are studying. Depending on your curriculum through the two or four years of course time, your extracurricular activities can land you a high-paying part-time job. When you become a part of the college society or lead a sports team, that contributes immensely to amplifying your CV and your interpersonal skills. For example; if you have polished your speaking skills along with good academic performance, becoming an academic tutor for instance can make you $20-$40 an hour. 

The job can upskill your portfolio while making a reasonable amount of money. Once you know how to balance work with your studies, you can make a handsome amount. Additionally, keep a lookout for on-campus jobs, many universities have admin jobs and internships that pay well.

3. Savings And Crowdfundings

Do not overlook personal savings as an option, it can become a great way of funding. This is especially for people who have time in their hands, start saving now as they can be very reliable in later stages. Crowdfunding is also a great option for students who want to cleverly finance their last semester of college. Sites like GoFundMe and Crowdfunder have helped students with tuition fees and added expenses. For two-year programs, fellowships and apprenticeship programs have also helped cover expenses. 

4. Private Loans

If nothing works out in your favour then private loans are still an option to cover your balance. If the loan is in the student’s name and you hold no credit history then your parents might have to co-sign for the loan. Proceed with caution as private loans can come with higher interest rates. These loans also do not allow flexible repayment methods as compared to other federal student loans. Read over the terms and conditions so you understand what you will be getting yourself into. Try to look out for reputable lenders who give loans for the lowest rate of interest.

If you’re an Indian student who requires financial aid and wishes to apply for an education loan, make sure you fill out the form in this blog.

Final Thoughts:

There are scholarships, loan providers, college students aids; all designed to help you cover the cost of your daily living expenses as well as education. But apart from that, the trivial details that a student must pay attention to right from the start are cutting costs, saving on food and books, planning your budget, and tracking your expenses. If you feel you must be running out of money amid a semester then take control of your time and how you spend your money. Protect your budget by identifying where the money is flowing more, how much are you spending on tuition, books, accommodation, food, and other social activities. One way of keeping track is by using apps available online or by maintaining a simple spreadsheet.

Instead of being unaware of your daily expenses, figure out how much you spend daily and hence through each semester. And even if your financial circumstances switch, take the help of the above-given steps to cleverly finance your final semester in college.

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Switching Student Loan Repayment Plans- Everything You Should Know

You can opt to switch your student loan repayment plans to lessen the burden on your finances. If you have taken a federal student loan, the standard repayment plan is of 10 years but it is possible to apply for an alternate plan with lower monthly repayments- this applies to both federal and private loans. While the repayment switching in federal plans is typically easier, it is possible to switch private repayment plans too. To switch private loan repayment plans you need to contact your loan provider and research the available options for switching repayment plans. Switching to a lower monthly payment plan can help you to avoid the consequences of student loan default, even if it bears the risk of increasing the interest rate or the amount you owe.  Let us take a look at the options available for switching student loan repayment plans and the process to do so in this article. We also hope to answer any doubts you may have like the following- 

How to change your student loan repayment plan?

 Can I switch to a more affordable repayment plan?

Types of Student Loan Repayment Plans |Switching Student Loan Repayment Plans

After graduation, borrowers are placed on the standard repayment plan of 10 years with a fixed monthly repayment amount. However, if you want to change this plan, you can do so anytime. If you decide on switching student loan repayment plans, you can opt for any of the following repayment plans- 

Graduate repayment plan

Under this scheme, the repayments start at a low rate and increase every 2 years. You will be able to pay off the loan within 10 years but will have to pay more in interest. If you have opted for a consolidation loan, you will have up to 30 years for repayment. 

If you are an Indian student who needs help with student loans, all you have to do is fill the form in this blog.

Extended repayment plan

Under this scheme, the student loan repayment plan is extended for up to 25 years, meaning much lower monthly repayments but paying a higher amount than the originally intended over the course of time. 

Suggested Read- Things To Know About The Student Loan Repayment For The UK

Income-driven repayment plan (IDR)

Under this scheme, the federal loan repayment term is extended for up to 25 years by the government, and the payments are capped at certain income percentages, meaning that if your income increases, so will your monthly payments. This plan is divided into 4 types-  Pay As You Earn (PAYE), Revised Pay As You Earn (REPAYE), Income-Contingent Repayment (ICR), and Income-Based Repayment (IBR).

Process of Choosing a Repayment Plan |Switching Student Loan Repayment Plans

What is the process to follow while switching student loan repayment plans? Read on to know-

  1. Choose the plan which is best for you, considering your economic situation.
  2. Contact your student loan servicer or provider and ask for guidance and expert help. This process is easy and free- it requires no third-party charges or payments.
  3. Complete all the necessary paperwork beforehand, including filling and completing the necessary application forms to switch your repayment plans.
  4. Sometimes the process of switching plans may take up time, make sure you don’t fall behind in your payments or default on your student loan in the meanwhile.

Wondering how the student loan repayment plans will reduce your expenses and lower the number of monthly payments you make? Read the following pointers to gain more clarity over which student loan repayment will be ideal for your economic situation-

  1. Pay on the basis of your income- Use the IDR repayment plan to pay off your student loans based on your income and reduce the monthly payment amounts significantly. Note that this option is usually only available for federal student loans. 
  2. Lower payments temporarily- As previously mentioned, the Graduate Loan repayment program helps you pay a lower amount every month for the initial years, increasing it every 2 years. This can provide a good temporary economic relief. 
  3. By opting for extended repayment plans, you can reduce your payments for a longer period of time. But note that this type of plan is only available to those who have taken more than $30,000 in outstanding Direct Loans. 

We hope all your doubts like How to change your student loan repayment plan? and Can I switch to a more affordable repayment plan? have been answered in this blog. If you are an Indian student looking for loans, do check out the variety of loans UniCreds offers to Indian students opting for study abroad programs.

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Best 5 Ways To Pay For Law School

Getting a law degree can easily cost you a six-figure sum. This makes law schools particularly very expensive. I do agree that once you have this prestigious degree, your earnings will be pretty rewarding but before that, you will have to figure out how to pay for law school. Fortunately, there are a few ways on how to pay for law school (or at least help pay for it). Here is some detailed information answering your question on “How can I pay for law school?”

How Can I Pay For Law School?

Ways To Pay For Law School Guide

Following is a list of all the smart ways to pay for law school. 

1. Law School Grants

The best part about grants is that you don’t have to pay them back. Many law schools offer generous grants, typically based on students’ financial needs or merit. Hence, ensure that you check with your school’s financial aid office to learn about the available options and the procedure to apply.

Do note that not all grants can be used for law school. For example, federal Pell Grants cannot be used for law school —  they’re majorly reserved for undergraduate students. Yet, grants are the best ways to pay for law school. 

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2. Scholarships For Law School

A great alternative to grants is scholarships. They are even more common than law school grants. You don’t have to repay scholarships and grants, thus making them the best option to pay for law school — if you qualify. Most law school scholarships come from the law schools themselves, so here too, check with your school’s financial aid office for details if you are wondering “How do I pay for law school?”

You should also search for scholarships from other organisations. Here are a few examples.

  • American Bar Association Legal Opportunity Scholarship: The ABA Legal Opportunity Scholarship awards $15,000 over three years to law students from diverse backgrounds.
  • NAACP Legal Defense and Educational Fund (LDF): Each year, the LDF offers the Earl Warren Scholarship to first- and second-year law students. This scholarship provides $10,000 for up to three years as well as the chance for an internship, externship, or research project, along with an invitation to the Civil Rights Training Institute. You must remain in good standing for all years you have the scholarship.
  • Federal Circuit Bar Association: Scholarships range from $5,000 – $10,000. The association classifies its law scholarships into two types: judicial and association.
  • Attorney Ken Nugent Legal Scholarship: Awards $5,000 to an annual winner. To be eligible, applicants must have a 3.0 GPA and write a 500-word essay.
  • BARBRI Law Preview One Lawyer Can Change the World Scholarship: Awards $10,000 to one first-place winner, $5,000 to one second-place winner and $1,000 to eight runners up each year. Applicants must be incoming first-year law students.
  • Minority Corporate Counsel Association LMJ Scholarship: Awards $10,000 for “women and diverse” first-year law students who have an interest in corporate law, as well as diversity, inclusion and equity.

If you need more resources on scholarships available in the US, head straight to: Scholarships To Study In The USA.

Again this is one of the most effective ways amongst all the easy ways to pay for law school. 

3. How Do I Pay For Law School? Student Loans.

There are two main categories of law school student loans: Federal and Private.

Federal student loans are accessed by filling out a FAFSA for law school financial aid (which is also how you get federal grants and work-study). These loans are generally the best option because they’re eligible for government repayment perks like income-driven repayment plans and Public Service Loan Forgiveness.

Further, there are two types of federal student loans for law students:

Direct Unsubsidized Loans: Here you are allowed to borrow up to $20,500 per year. The total amount you can borrow over the course of your education is capped at $138,500. For the 2019-2020 school year, the interest rate for direct unsubsidized loans was 6.08%. There’s also a one-time fee, which is fixed at 1.059% of the loan amount for funds borrowed after Oct. 1, 2019.

Don’t forget to read: Subsidized Loan Vs An Unsubsidized Loan: Which Is Better And Why

Direct PLUS Loans: PLUS loans tend to be relatively more expensive than direct unsubsidized loans, so it’s better to turn to them only after you exhaust the balance for the latter. For the 2019-2020 school year, the interest rate for Direct PLUS loans was 7.08%. The one-time loan fee was 4.236% for loans disbursed after Oct. 1, 2019. There’s no set cap to PLUS loan borrowing — you can take out an amount up to your school’s cost of attendance, minus other financial aid you receive.

If you have good credit, private student loans may be a wise choice. Here you may be able to qualify for a lower interest rate than what federal loan programmes offer. UniCreds is the best place to get the lowest interest rates on private loans. If you are sincerely considering student loans then all you need to do is fill the form in the blog. A professional team from UniCreds will get in touch with you to ensure you get the best loan.

Now’s the right time to secure a safe education loan! Fill the form in this blog TODAY!

4. Work Part-Time | Ways To Pay For Law School

 Law students can earn federal work-study funds by working part-time. However, not all law schools participate in these work-study programmes. Also, you must know that since being a full-time law student is demanding, some schools don’t allow work-study for first-year law students, or they limit work-study hours during the first year of study. 

Do note that since you must earn work-study funds, you can’t use this money for upfront tuition costs. But a work-study job could help pay for living expenses without going into debt — if you can balance your job and studies. If you’re attending law school part-time while working, see if your employer offers any tuition assistance programmes to help with the cost of your education.

Read More: Work-Study Techniques – Your Guide To Balancing Studies and A Job

Do you see? Paying for law school isn’t very difficult. 

5. Law School Loan Forgiveness | Ways To Pay For Law School

If you’re pursuing a career in government or public interest law, or if you end up in a relatively low-paying job, law school loan forgiveness may be a good option.

Two common ways for law school graduates to get student loan forgiveness are:

Public Service Loan Forgiveness (PSLF): This government programme can clear your remaining federal loan balance after you make 120 on-time monthly payments while working for the government or a qualifying non-profit employer. However, note that the requirements for this programme can be quite complicated so I suggest that you read this blog carefully: Public Service Loan Forgiveness – All You Need To Know!

Income-Driven Repayment Plans: There are four income-driven plans that cap your monthly federal loan payments at 10% to 20% of your gross income. All four plans also forgive your remaining loan balance after you make payments for 20 or 25 years, depending on the plan, though you may need to pay income tax on the forgiven amount.

Suggested Read: Pay As You Earn (PAYE) Repayment Guide

Hope you found this blog insightful. Cheers!

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Flight School Loans: Brilliant Options To Finance Pilot Training

According to L3Harris, a global leader in airline pilot training, getting a commercial pilot’s license could cost more than $83,995 per year, while a private pilot’s license could cost around $11,500. Although these figures of the cost of pilot training loans do not reach the levels of a four-year degree from a university, going to a flight school is certainly not cheap. Also, there is an acute shortage of trusted information available regarding flight school loans, so here’s the solution for you. 

This article has all the information related to student loans for flight school, flight school financing and other aviation scholarships. Let’s get started.

How To Get Flight School Loans

Like college, aviation training is quite expensive, and it’s highly unlikely you have the savings or income to pay for it in full. That means you’ll likely have to rely on loans. To receive flight school financing, you’ll take the same steps as a student pursuing a four-year degree — your options will just be more limited. Let’s look at each option, starting with federal loans.

Federal Financial Aid For Flight Training Loans

Federal financial aid should definitely be the first step for all students looking for financing. This is because federal aid comes with way better terms and repayment options. Unfortunately, federal aid is only available to students attending schools that are accredited, and most flight schools are not.

However, just because this holds true for the majority of schools, doesn’t mean that is the case for all of them. It’s best to ask schools you’re considering if they accept federal financial aid. Here are some types of federal student loans you could receive for flight school:

Direct Subsidized Loan: This type of loan is available to students who can demonstrate they have financial needs in documents. In this option, there are limits on how much you can borrow. The Department of Education pays the interest on subsidized loans while you’re in school, during deferment and for the first six months after you leave.

Direct Unsubsidized Loan: Here too, you have a limit on the borrowing amount but you are not required to show financial need. You’re responsible for paying all interest, and the interest will accrue while you’re in school.

Don’t forget to read: Subsidized Loan Vs An Unsubsidized Loan: Which Is Better And Why

Direct PLUS Loan: This type of loan is available to parents of aviation school students. They can borrow up to the cost of tuition minus any financial aid, but they’ll need to submit to a credit check to qualify. Read more about this loan here: PLUS Loan: A Complete Guide.

Work-Study: Work-study programme provides part-time jobs to undergraduate, graduate, and professional students with financial needs. The money earned is used to pay for school.

In addition to possibly getting government-funded flight school loans, filling out the FAFSA could also unlock the Federal Pell Grant. Since this is not a loan, it doesn’t need to be repaid. You just need to demonstrate the financial need to qualify. The maximum award amount for the 2020-2021 school year was $6,345.

Flight School Loans: Private Lenders

Like I mentioned before, many flight schools are ineligible for federal loans. Even if you get one, it might not cover your full cost of attendance. In these cases, you might have to resort to private flight school loans. But there are a few important things to know before applying:

  • Not all private lenders offer flight school loans

It’s important to know that not all private lenders issue loans for flight school, as it’s considered a trade school. On the other hand, some banks, credit unions and online lenders — such as CollegeAve, Wells Fargo and Sallie Mae — have specific loan programmes geared towards aviation school.

  • Private loans differ from federal loans

Federal student loans are issued by the government, whereas private student loans are offered through private lenders and other financial institutions. For private loans, the eligibility requirements, interest rates and repayment terms are determined by the lender. Be sure to shop around to find the lowest rates and your best overall loan.

Recommended Reading: 3 Easy Ways To Find Out Whether A Student Loan Is Federal Or Private.

If you decide that a private student loan is the best option for you, all you need to do is fill the form in this blog. You can easily save a ton of effort by doing so and a professional team from UniCreds will contact you to ensure you get the best flight school loan for yourself. 

Worried about financing your education abroad? Fill the form in this blog for deals on loans!

Other Types of Flight School Loans

In addition to federal and private student loans, there are other ways to find flight training loans. Make sure to explore some of these options:

  1. Your school’s financial aid office

Because there are limited options for student loans for flight school, some schools offer financing programmes to students. Ask your school whether it has any financing programmes. If it does, compare the terms with private lenders to see if it’s the best deal you can get.

If you need resources on scholarships available in the US, head straight to: Scholarships To Study In The USA.

  1. Airline training programme

Airlines sometimes offer tuition reimbursement programmes or their own training programmes. If you’ve already determined which airline you plan to fly for, check to see whether it offers one of these programmes.

  1. Pilot training loans

In addition to flight school loans, you can find funding specifically for aviation training. Some examples include:

Aircraft Owners and Pilots Association (AOPA) Aviation Finance offers multi-rating (private and instrument) financing for as little as $75 per month, depending on your credit score and how much you borrow.

American Airlines Federal Credit Union is accessible to Air Transportation Industry employees for loans up to $40,000.

WE Florida Financial has the We Fly programme, which provides a fixed-rate line of credit for up to $30,000.

Hope you found this blog helpful. Good luck with your career ahead. Cheers!

Thank you for reading this blog on ‘Flight School Loans: Brilliant Options To Finance Pilot Training’. If you enjoyed reading this blog and would like to continue reading more about student loans then the following blogs may interest you.

Alternatives To The 529 Plan – Clever Ways To Save

If you are a parent looking to save for your child’s future, you must have heard about the 529 plan. Right from their inception, they have been one of the best vehicles available to save for college expenses. However, they do have their own downsides and given the rise of options available today, it may not be very wise to opt for the 529 plan. There’s a reason behind why I say this. In this article, I will explain to you why this long-existing savings option may not be the best choice and we will explore the best alternatives to the 529 plan. 

What Is A 529 Plan And How Does It Work?

A 529 plan is a tax-advantaged savings account that can be utilised to save and pay for your child’s qualified college expenses. There are two types of 529 plans: prepaid tuition plans and college savings plans. Since the latter is more common, we will focus on that one.

A 529 plan enables you to make contributions, which grow tax-free. Even when your child starts withdrawing money from this account to pay for eligible expenses, there are no taxes on those distributions. In addition to these tax benefits, some states also offer additional tax deductions or credits to taxpayers who make contributions. 

Although there are plenty of perks that come when saving for college with a 529 plan, you must know that there are some disadvantages that may cause you to look for better alternatives to the 529 plan.

Let’s quickly see what are the pros and cons of the 529 plan. 

Pros:
  • Funds in the 529 plan are exempt from federal taxes if used for eligible educational expenses.
  • These educational expenses cover private elementary, secondary, or religious schools as well as apprenticeships, homeschooling, and even student loan debt repayment.
  • Once you’ve contributed to a 529 plan, you can also invest the money. This helps you grow the money over time and get better returns on your sum. 
  • Friends and family members can also make contributions to this account on special occasions. 
Cons:
  • You have to use these funds only for qualifying educational expenses to be able to reap any tax benefits. That strictly includes tuition, fees, books, supplies, equipment, and in some cases, room and board. 
  • If you or your child uses the money for anything else, it’ll be subject to income taxes, in addition to a 10 percent penalty.
  • If your child secures a scholarship, you can withdraw the money without incurring a penalty. However, the funds will still be subject to income taxes.
  • You don’t get much control over where you invest your money — these investment options are determined by the state that offers the plan — and some states charge relatively high fees.
  • Finally, 529 funds count towards your child’s assets and Expected Family Contribution (EFC) calculation for financial aid, potentially preventing a student from receiving need-based support in the form of grants, work-study programs, and subsidized student loans.

Unsure of which loans to get? Get a FREE consultation by filling the form in this blog!

Here Are The Best Alternatives To The 529 Plan

After understanding so many downsides, it makes sense to consider better alternatives to the 529 plan for good college savings. Following is a list of such options. 

1. Roth IRA

The first and foremost smart 529 plan alternatives to consider is the Roth IRA. It is an individual retirement account that allows you to save and invest after-tax money but it can also be used to save for college.  

Pros

  • You can withdraw your contributions at any time free of taxes and penalties.
  • Withdrawals for qualified education expenses won’t incur a penalty.
  • You can withdraw any of your funds without penalty after age 59 ½.

Cons

  • The allowed annual contribution is limited. You can save only up to $6,000 in 2021, or up to $7,000 if you’re 50 or older. 
  • There are no state income tax benefits for Roth IRA contributions.
  • Using a Roth IRA for college savings undercuts your efforts to save for retirement.

Check out this blog: 6 Awesome Ways To Get Paid To Attend College

2. Brokerage Account

Among saving for college alternatives to the 529 plan, a brokerage account is quite a popular choice among more experienced investors. These accounts won’t give you any tax breaks, but they can give you more control over your investments. Options range from stocks and mutual funds to bonds and currency.

Pros

  • A brokerage account gives you more power over investment choices.
  • There are no limitations or penalties based on how you use the funds.

Cons

  • There are no tax benefits.
  • You have no incentive to hold onto the money for college expenses.

Suggested Read of the Hour: Investing In Dollar Vs Investing in Rupee: The Big Question

3. Custodial Accounts (UGMA/UTMA)

If there’s even a slight chance that your child may not attend college, but you still want to plan and save for their future, some good alternatives to the 529 plan that can still accelerate college in this situation are to utilize a custodial account. UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act) are two common options.

Pros

  • Both offer standard tax breaks for students under age 18. The first $1,100 is tax-free, the second $1,100 is taxed at your child’s income tax rate and the remaining amount is taxed at the parent’s income tax rate.
  • There aren’t any restrictions on how the funds are used so long as they benefit the child. This will keep your child from losing your financial assistance even if they opt not to attend college.

Cons

  • You have less control over how your child uses the money. Once your child reaches the age of majority, you can’t legally prevent them from using the funds to take a vacation or buy a posh car rather than for their education.

Must Read: How To Pay For Your College On Your Own?

These are the 3 good alternatives to the 529 plan. Hope you found this blog useful. Happy saving! 

Thank you for reading this blog on the 529 Plan Alternatives. If you’d like to read more, here are some blogs you may like –

Hybrid Loans: What Is It And When Should You Get One?

We as borrowers would always look for low-interest rates, right? Obviously, that decreases the monthly payments we make and thus minimises the overall cost of borrowing. However, do we have that option available? No, because banks and lenders want to stay in business. While we do have variable interest rate loans, which are pretty low in the beginning, they are unpredictable. On the other hand, the fixed interest rate loans have a relatively high-interest percentage but they do offer security and predictability. If you are a little greedy like me and wish to grab the best of both worlds (which most people want to), you have the option of Hybrid Loans.

Sounds amazing? It actually is. Hybrid loans are a way to lower your interest rate without the risk of a higher payment next year. There’s more to it and in order to ensure you know everything about hybrid loans, ensure you read the blog till the very end. 

Basics of Hybrid Loan Product

Like I mentioned above, hybrid loans bring the best of both worlds to you – fixed interest rates and variable interest rates. In order to understand hybrid loans better, we must start from the beginning, that is understanding these two crucial terms. 

Fixed Interest Rates

As the name suggests, fixed interest rate loans are the ones where the lender specifies the exact interest rate on the day you sign the documents and the same interest rate prevails for the entire lifetime of the loan. The primary benefit of fixed-rate loans is that they are predictable, consistent and secure. The set interest rate won’t change, no matter what. It gives you stability when budgeting since you always know what your monthly payments will be. The only drawback here is that this initial fixed rate would be more likely a high value compared to market standards. 

Variable Interest Rates (Adjustable Interest Rates)

As opposed to fixed-rate loans, adjustable rates fluctuate with the market. This type of loan is likely to come with lower starting rates which makes it appealing. However, if interest rates rise (as measured by an index), the interest rate on your loan will rise as well. This is a good choice to opt for but just in case the interest hike kicks in at a later stage then you might face difficulty in repaying the sum.

You may also want to read: Education Loan Interest Rates and How it Can Change

Getting a lower rate now, even though it might increase in the future, could be a wise trade-off if you plan to repay your loan before the student loan interest rates have a chance to rise too much.

In hybrid loans, a long-offered option on a mortgage but a relatively new phenomenon in education financing, lenders or banks typically offer a fixed rate for a portion of your repayment and a variable rate kicks in at a later stage. 

When Should You Choose A Hybrid Loan?

The lower starting rate comes with a decent amount of risk, but hybrid loans can make sense in the right situation. These situations are:

You’re Borrowing For A Short Term

If you plan to quickly move or refinance within just a few years, you must take advantage of the initial lower rate and get out of the loan before adjustments begin. Although, do remember that any strategy can backfire if plans change and circumstances aren’t in your favour.

Suggested Read: How To Get An Education Loan Without Collateral?

You Make Prepayments

You can reduce your risk of paying high payments later on by making significant additional payments in the early stages. If you anticipate having sufficient income to quickly pay down your loan balance, you may be able to pay off the loan before adjustments barge in. Even if you are unable to pay the entire sum before adjustments begin, a lower balance in the future will help offset higher rates.

Rates Are In Your Favour

If rates fall according to the market trend, that’ll be great for your hybrid student loan. Not only did you start with a low interest rate, but falling rates could bring that interest rate down even lower. Predicting the future is hard, though, so make a backup plan in case rates rise. 

Do Read: How to Get a Lower Interest Rate on an Education Loan

You Have A Poor Credit

If your credit needs a boost, you can benefit from relatively low rates during the early years of a hybrid education loan. Your on-time payments should help to improve your credit, but keep in mind that qualifying for a better rate down the road is never guaranteed—especially if rates rise sharply.

Where Can You Find Hybrid Loans?

If you have analysed all the aspects well and decided to get a hybrid loan for yourself then the question would be where to find one. Your answer is below. 

Following are the two reputable lenders providing hybrid loan products.

1. CommonBond

CommonBond, a top-rated lender, currently offers a 10-year term for hybrid loan rates. That’s an initial five years on a fixed rate and five more on a variable rate. This hybrid loan could be a cost-saver if you have good but not excellent credit.

2. iHelp

iHelp is another example of a lender that features hybrid loan rates, although it offers you only a 20-year repayment term. Your rate would be fixed for the initial five years and then get readjusted every five years until your debt has been repaid.

Don’t forget to read: Interest-Free Loans for Students – Yes They Exist!

Or if you are looking for a hassle-free hybrid loan then all you have to do is fill this form A professional team from UniCreds will get in touch with you to ensure you get the best student loan for yourself. 

That’s it for this blog. Hope you understood everything about hybrid loans well. 

Thank you for reading this blog on ‘Hybrid Loans: What Is It And Should You Get One?’. If you enjoyed reading this blog and would like to continue reading more about student loans then do check out our following blogs.

Student Loan Lawyer – When Should You Hire One?

Having student loan debt following you like a shadow everywhere after you graduate is something that none of us like. Well, sometimes these debts may go above and beyond just debts to become a nightmare. In such critical situations, it may be wise to consult a student loan lawyer. 

In this blog, you will learn everything about what a student loan lawyer is and when you should approach one. Let’s get started.  

Choosing A Student Loan Lawyer Guide

Let’s understand everything about how you should choose the appropriate student loan lawyer step-by-step. 

What Is A Student Loan Lawyer?

A student loan lawyer is a lawyer with specialised or advanced knowledge of the student loan domain.  

They can help you navigate the complex world of student loans and simplify some tricky situations. They are well-versed with the federal and private student loans, their differences and most importantly the ways through the federal system. Student loan lawyers are the geniuses that can get individuals out of default and onto affordable repayment plans. They are the ones who know how to use the law with or without a lawsuit to make the system work for the borrower.

Note: A student loan lawyer is poles apart from a student loan debt relief agency. While the best student loan attorney will charge you a fee for their service, they provide much more essential assistance rather than doing what you could easily do yourself. Debt relief agencies merely sign up for income-driven repayment plans which is something you can do on your own for free. While a student loan lawyer will act as your legal advocate and negotiate with your loan servicer or even file a lawsuit if warranted.

Student Loan Lawyer Requirement

Before you go out looking for a student loan lawyer, it is necessary to understand how they are of assistance to you. Not everyone needs legal counseling, but given the correct situation, it could be a good investment.

Following are the ways in which a student loan lawyer can help you: 

  • They can provide you with legal advice and guidance after knowing your exact situation and guide you about your rights and options.
  • They can represent your interests in communications or negotiations with an institution or individual. For example, a student loan holder, student loan servicer, debt collection agency or administrative body.
  • They can protect you from unfair or abusive conduct by debt collectors and other agencies.
  • A lawyer can represent you in court if needed.
  • A lawyer can also help you resolve delinquencies or defaults or apply for loan discharge.
  • They can handle credit disputes.

Student loan lawyers can help you with the nuances of private student loans, too. Also, if you’re dealing with delinquency or default or considering filing for bankruptcy, a student loan lawyer may be able to help.

Don’t forget to read: Student Loans and Bankruptcy

Should You Hire A Student Loan Lawyer?

Now that you know how a student loan lawyer can help, the next obvious question is – should you hire one? Is it the right time? Let’s find out. 

Generally, only rare matters compel you to hire an attorney. Even filing for bankruptcy or defending against a lawsuit can be done without legal representation. However, just like every person is different, every situation is different as well. Whether you should contact a student loan lawyer really depends on your specific circumstances.

Recommended Reading: Lawsuits for Private Student Loans

While you may not necessarily need a student loan lawyer, hiring one can be of huge help if you are feeling overwhelmed and require some assistance dealing with your specific situation. Student loan lawyers can share their expertise and offer solutions — solutions that aren’t very easy to figure out on your own.

Where Can You Find An Affordable Student Loan Attorney?

If you have finally decided that hiring an attorney is the right choice for you, finding one may be challenging. Hence, here is a list of resources to simplify the process. 

You will be happy to know that referring to these resources will significantly lower your student loan lawyer costs. 

However, if you don’t feel you’re ready to resort to an attorney yet, consider doing extensive research on your own and exploring as much as you can. Once you exhaust all of the available online resources you may want to consider talking to your loan provider to reiterate the possible options lying ahead. 

Also Read: How To Refinance Federal Student Loans

Are you worried about your student loans? If you are looking for student loans and end up struggling to find the perfect one for yourself then all you need to do is fill this form A professional team from UniCreds will get in touch with you to ensure you get the best student loan for yourself. 

Thank you for reading this blog ‘Student Loan Lawyer – When Should You Hire One?’. If you enjoyed reading this blog and would like to continue reading more about student loans then do check out our following blogs.