More USA Student Loans Repayment Plan Stuff . . .
Student Loan Forgiveness: Will You Qualify for $0 Payments Under Biden’s New Plan?
David Nadelle
Fri, January 20, 2023 at 10:31 PM GMT+8
With the legality of President Biden’s broader federal student loan forgiveness program in question, the U.S. Department of Education (ED) has proposed revisions to income-driven repayment (IDR) plans that could result in considerable cuts to loan payments. In fact, some borrowers will have $0 monthly payments.
The ED-proposed regulations will amend the Revised Pay As You Earn Repayment (REPAYE) plan and phase out the three other existing IDR plans available to lower-income debtors - Pay As You Earn Repayment (PAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) plans.
Borrowers participating in existing IBR, ICR and PAYE plans will follow the new plan when enacted into law, but will need to enroll through their student loan provider or through the Federal Student Aid site. The new proposed regulations do not include changes to accommodate those holding Parent PLUS loans, which are not repayable on an IDR plan.
To qualify for $0 monthly payments, borrowers must make less than around $30,600 a year, while individuals in families of four much make less than roughly $62,400, per the ED press release.
“Today the Biden-Harris administration is proposing historic changes that would make student loan repayment more affordable and manageable than ever before,” U.S. Secretary of Education Miguel Cardona said in a statement.
As Business Insider reported, undergraduates will have their payment obligations slashed in half, as the new plan will revise the required discretionary income payment from 10% to 5%. Those holding graduate loans will continue to pay 10%, and those with an existing mix of graduate and undergraduate loans will have to pay between 5% and 10%.
The current REPAYE plan calculates discretionary income as any money earned over 150% of the federal poverty guidelines, which are used to determine your eligibility for certain programs and benefits, according to CNBC. Under the new regulations, borrowers won’t be required to make payments based on income over 225% of the federal poverty guidelines.
The Biden administration is attempting to correct what it deems is a flawed IDR plan system and a wider problem with never-ending debt payments. If enacted, the new REPAYE legislation would enable many borrowers with original federal student loans of $12,000 the opportunity to pay it off after 10 years. Leftover debt after 20 years of payments will be forgiven, as it is now under REPAYE plan rules.
“We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,” said Cardona.
https://news.yahoo.com/student-loan-forgiveness-qualify-0-195546151.html
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Does My Spouse Have To Pay My Student Loans If I Die?
Back in 2019, when more than 44 million Americans had a combined student loan debt of $1.5 trillion, insurance firm Haven House surveyed borrowers about the impact of death on their student loans and found that a large majority - 73% of respondents - didn’t know what would happen to their debt if they died.
Hopefully student loan borrowers know more now. Although private loan terms differ from lender to lender according to their policy agreements, holders of federal student loans (92% of all student loans, per Forbes), will get their outstanding debt discharged by the Department of Education (ED) if they die.
But what about any surviving spouses and privately held loan debt incurred by the deceased?
As Lending Tree’s Student Loan Hero noted, there are three instances in which a surviving spouse may be held liable to pay the remaining debt of the departed borrower. A spouse may be required to repay a deceased partner’s student loan if they:
1. Co-Signed a Partner’s Student Loan
In the case of a loan that was co-signed by a spouse, there’s a chance that they could be legally responsible for repaying it if the primary borrower dies. If you co-signed one or more of your spouse’s private student loans, your legal obligations may remain regardless of marital status. However, it depends on the loan.
For federal student loans, the loan will be discharged because co-signers aren’t required. If you were a co-signer for their private student loan, you’ll need to contact the lender to see if there is any possibility of getting out of paying the loan.
2. Combined Debt Into a Joint Spousal Consolidation Loan
Couples take on a lot of shared financial responsibility when they marry. This doesn’t normally extend to student loan debt - except if the couple combines their respective debts into a joint spousal consolidation loan (or one partner co-signs for another’s debt, as mentioned earlier).
When you take out a joint spousal consolidation loan, you will be using a private refinancing company, which might result in one half of a marriage or legal partnership take over the other’s debt as a sole borrower (and be left on the hook for repaying the remainder of the loan by themselves) should the other half pass away.
3. Live in a Community Property State
Most states abide by equitable asset distribution laws, however, there are nine states that currently have community property laws, where all assets and debts earned during a marriage are treated as community property - and are therefor equally owned by both spouses, regardless of who registered, bought or incurred them.
If you live in one of these states - Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin - a student loan is considered community property and, unfortunately, will be charged against the surviving spouse if it was taken out after marriage and before divorce.
Additionally, borrowers that have refinanced a federal loan are in a tricky situation because their loan has changed from a dischargable federal student loan to a potentially dischargable, less-protected private student loan. Again, in the event of a borrower’s passing, the company providing the refinanced loan will need to be contacted and the policy reviewed.
https://www.gobankingrates.com/loans/student/does-spouse-have-to-pay-my-student-loans-if-i-die/?utm_term=related_link_3&utm_campaign=1204001&utm_source=yahoo.com&utm_content=9&utm_medium=rss
David Nadelle
Fri, January 20, 2023 at 10:31 PM GMT+8
With the legality of President Biden’s broader federal student loan forgiveness program in question, the U.S. Department of Education (ED) has proposed revisions to income-driven repayment (IDR) plans that could result in considerable cuts to loan payments. In fact, some borrowers will have $0 monthly payments.
The ED-proposed regulations will amend the Revised Pay As You Earn Repayment (REPAYE) plan and phase out the three other existing IDR plans available to lower-income debtors - Pay As You Earn Repayment (PAYE), Income-Based Repayment (IBR) and Income-Contingent Repayment (ICR) plans.
Borrowers participating in existing IBR, ICR and PAYE plans will follow the new plan when enacted into law, but will need to enroll through their student loan provider or through the Federal Student Aid site. The new proposed regulations do not include changes to accommodate those holding Parent PLUS loans, which are not repayable on an IDR plan.
To qualify for $0 monthly payments, borrowers must make less than around $30,600 a year, while individuals in families of four much make less than roughly $62,400, per the ED press release.
“Today the Biden-Harris administration is proposing historic changes that would make student loan repayment more affordable and manageable than ever before,” U.S. Secretary of Education Miguel Cardona said in a statement.
As Business Insider reported, undergraduates will have their payment obligations slashed in half, as the new plan will revise the required discretionary income payment from 10% to 5%. Those holding graduate loans will continue to pay 10%, and those with an existing mix of graduate and undergraduate loans will have to pay between 5% and 10%.
The current REPAYE plan calculates discretionary income as any money earned over 150% of the federal poverty guidelines, which are used to determine your eligibility for certain programs and benefits, according to CNBC. Under the new regulations, borrowers won’t be required to make payments based on income over 225% of the federal poverty guidelines.
The Biden administration is attempting to correct what it deems is a flawed IDR plan system and a wider problem with never-ending debt payments. If enacted, the new REPAYE legislation would enable many borrowers with original federal student loans of $12,000 the opportunity to pay it off after 10 years. Leftover debt after 20 years of payments will be forgiven, as it is now under REPAYE plan rules.
“We cannot return to the same broken system we had before the pandemic, when a million borrowers defaulted on their loans a year and snowballing interest left millions owing more than they initially borrowed,” said Cardona.
https://news.yahoo.com/student-loan-forgiveness-qualify-0-195546151.html
-----------------------------------------------
Does My Spouse Have To Pay My Student Loans If I Die?
Back in 2019, when more than 44 million Americans had a combined student loan debt of $1.5 trillion, insurance firm Haven House surveyed borrowers about the impact of death on their student loans and found that a large majority - 73% of respondents - didn’t know what would happen to their debt if they died.
Hopefully student loan borrowers know more now. Although private loan terms differ from lender to lender according to their policy agreements, holders of federal student loans (92% of all student loans, per Forbes), will get their outstanding debt discharged by the Department of Education (ED) if they die.
But what about any surviving spouses and privately held loan debt incurred by the deceased?
As Lending Tree’s Student Loan Hero noted, there are three instances in which a surviving spouse may be held liable to pay the remaining debt of the departed borrower. A spouse may be required to repay a deceased partner’s student loan if they:
1. Co-Signed a Partner’s Student Loan
In the case of a loan that was co-signed by a spouse, there’s a chance that they could be legally responsible for repaying it if the primary borrower dies. If you co-signed one or more of your spouse’s private student loans, your legal obligations may remain regardless of marital status. However, it depends on the loan.
For federal student loans, the loan will be discharged because co-signers aren’t required. If you were a co-signer for their private student loan, you’ll need to contact the lender to see if there is any possibility of getting out of paying the loan.
2. Combined Debt Into a Joint Spousal Consolidation Loan
Couples take on a lot of shared financial responsibility when they marry. This doesn’t normally extend to student loan debt - except if the couple combines their respective debts into a joint spousal consolidation loan (or one partner co-signs for another’s debt, as mentioned earlier).
When you take out a joint spousal consolidation loan, you will be using a private refinancing company, which might result in one half of a marriage or legal partnership take over the other’s debt as a sole borrower (and be left on the hook for repaying the remainder of the loan by themselves) should the other half pass away.
3. Live in a Community Property State
Most states abide by equitable asset distribution laws, however, there are nine states that currently have community property laws, where all assets and debts earned during a marriage are treated as community property - and are therefor equally owned by both spouses, regardless of who registered, bought or incurred them.
If you live in one of these states - Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin - a student loan is considered community property and, unfortunately, will be charged against the surviving spouse if it was taken out after marriage and before divorce.
Additionally, borrowers that have refinanced a federal loan are in a tricky situation because their loan has changed from a dischargable federal student loan to a potentially dischargable, less-protected private student loan. Again, in the event of a borrower’s passing, the company providing the refinanced loan will need to be contacted and the policy reviewed.
https://www.gobankingrates.com/loans/student/does-spouse-have-to-pay-my-student-loans-if-i-die/?utm_term=related_link_3&utm_campaign=1204001&utm_source=yahoo.com&utm_content=9&utm_medium=rss