If you could receive relief from your student loan payments, would you? Student loan debt is a difficult road to navigate down and many students find that it is not at all what they expected. Sometimes expectations are different because students either think that they are going to move right into their career when they graduate, thus making repayment easy or they think that the amount they borrowed is the exact amount they have to pay back. Unfortunately, both of these ways of thinking can lead to students taking out too much money and then not being able to easily pay it back.
When it comes to student loan debt, many students find that they either have a hard time paying their bill when it comes due, they live near poverty because of the payments, or they altogether default on the loan itself. With many different states recognizing this as a crisis, lawmakers have begun to introduce new laws to help offset these costs and reduce the amount the students have to pay.
For example, a new student loan relief bill has been introduced to Congress and if it is acted upon, many students will benefit from the relief that it provides.
What’s the New Bill?
The new bill is called the Student Tax Affordability and Relief Act. This bill was recently introduced into the House of Representatives and it is designed to help provide an exclusion for gross income on the amount of money that an employer pays towards an employees’ student loans.
What this means is that the bill would specifically take any gross amount paid by an employer and exclude it from any gross income amounts and deem it qualified student loan payment assistance. The entire taxable yearly limit would be set at $10,000.
Are There Other Programs in Place?
Yes. Many states are beginning to adopt their own programs to help students when it comes to their student loan debt. For example, in Minnesota, a new program that is geared towards refinancing student loans allows qualifying students to refinance to receive a new interest rate that will not exceed 6.95 percent, thus saving many students thousands. While this isn’t lower than some low interest student loans given by private lenders, it is lower than the rates that many students currently have.
In addition to Minnesota, New York also has a new program called Get on Your Feet, which provides payments for up to two years on a students’ loans to allow them the opportunity to get out into the job world and get back on their feet. Students must make less than $50,000 per year to qualify for this program and many will.
Also, many employers are beginning to offer programs where they will pay for an employees’ student loans if the employee works for the company for five years. This type of program is beneficial to both the employee and the employer.
Tips for Paying Back Your Student Loans
While there are new bills being introduced and more states are offering new programs to help with student loan debt, the fact of the matter is – the debt is yours and it must be paid back. Many students make the mistake of assuming the debt will just disappear if they ignore it and it does not work this way. In reality, you are only hurting yourself when you default on your loans and there are legitimate consequences that will follow.
If you find that you are having trouble making your student loan payments, you need to speak with your loan servicer to explore your options. Federal student loan borrowers do have many options including new repayment plans, longer repayment plans, and income-based plans that will allow you to essential only pay what you can afford.
There is no excuse to not pay back your loans and if you need to rework your budget, it is something you need to consider. Once your student loans have been paid, you can live free from debt, but until that happens, it WILL follow you.