Dealing With Student Debt

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22 Oct 2013

Wiping out debtIf you’re anything like 37 other million Americans, you’ve got an outstanding student loan debt. However, thanks to several new government programs, you could see your monthly payments shrink to close to zero. David Siegel, a bankruptcy attorney and home lending specialist at Citibank, will speak about the topic tomorrow, Oct. 22 both live at OU Headquarters and via webcast: at 5:30 p.m. At this free event, he will be discussing ways in which you can lower your monthly payments as well as decrease the total student debt loan.

Here is the countdown of what will be covered:

5.      See what the government can offer you

The government offers several programs that can reduce your debt load. The Income Based Repayment program decreases monthly payment according to a formula based on family size, income and the national poverty level. Seigel says, in one example, that a person’s monthly payment can be decreased from $547 to $142.

4.      Consider a career in public service

A new program from the federal government allows people who work in the public service field — teachers, nurses, firefighters, police officers, soldiers and legal aide attorneys — to totally wipe out their debt after 10 years and 120 verified payments without any negative effect to their credit rating. “The basic premise is they want to reward people who are taking occupations that don’t pay as much as other professions,” Seigel explains.

3.      Always make payments

At the end of 25 years most outstanding student debt loans from the government are waived. A new program may even lower that to 20 years, but the catch is you need to make all the payments.

2.      Don’t declare bankruptcy

Siegel says that no matter how dire the straits, government student loans, unlike credit card debts, are not forgiven by declaring bankruptcy.

1.      Attend or tune in to the presentation

Siegel will be discussing the full reach of the government loan forgiveness programs tomorrow as well as providing the details of how to apply.

The words of this author reflect his/her own opinions and do not necessarily represent the official position of the Orthodox Union.