How to Stay out of Default Paying Back Student Loans

The massive expenses behind higher education in America have been a hot button issue for many years. Every year, thousands of students graduate with thousands of dollars of student loan debt to their name. It may seem like an unbearable vicious cycle to most, but Michigan State University’s Office of Financial Aid stresses that there are options available that will keep students from going into default. Reaching default haunts credit scores for years, affecting what purchases a person can make. Graduates today are using plans that tie loan payments to income. These income-based programs are built to make loan repayment manageable and make life easier for those who struggle to find a job, although the Financial Aid staff does warn about interest collecting when you miss payments.

Focal Point Spring 2013 [Show 6]

The East Lansing School Board has decided to close its doors to one of its Elementary Schools. A push for bikers to wear reflective gear in the State of Michigan should help prevent major accidents and death on the roads. And, graduating seniors may face a hard road ahead, having to pay off student loans. Focal Point is an Emmy awarding winning, student produced newscast from the School of Journalism at Michigan State University.

Pay As You Earn

President Obama recently signed a law to help college students pay off their student loans. ┬áThe Pay As You Earn proposal reduces the monthly loan repayment rate to 10 percent of an individual’s income and forgives all remaining debt after 20 years. The new proposal is an improvement from the previous student loan plan that had a loan repayment rate of 15 percent and forgave remaining debt after 25 years. Graduates must update their income every year through IRS tax forms or other credible documentation in order to maintain the new repayment rates. Graduates don’t have to choose the Pay As You Earn plan after graduating, but can instead start with a different repayment plan and switch between plans as they please.