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New student loan program could aid in eliminating your debts

Many Ohio students emerge from college with a shiny new degree, and quite a few also graduate with high levels of student loan debt. The federal government has offered a range of repayment programs aimed at helping individuals cover the cost of their debt burden. A new program will soon be available, and it could help in eliminating your debts related to student loans.

The program is known as Repaye, and it will extend favorable income-based repayment options to all federal borrowers. The monthly payment will be limited to 10 percent of the borrower's discretionary income. As the borrower earns more money, the monthly payment amount will also rise. After a period of 20 years, any remaining balance would be forgiven.

For some, this plan will offer a way to reduce monthly loan service payments, leaving more flexibility for covering other financial obligations. Many students relied on credit cards to get through their college years, and they hold a high level of consumer debt in addition to their student loans. For these consumers, debt relief may not be as simple as restructuring their student loan debt.

Personal bankruptcy is an option that is available to Ohio residents. While bankruptcy will not lead to the discharge of student loans, it is an excellent means of eliminating your debts that are not associated with an education loan. Each and every set of circumstances is unique, and there are a number of debt relief paths from which to choose. Bankruptcy is an option that deserves careful consideration, especially for those who are looking into the new Repaye program.

Source: americanprogress.org, "Proposed Student Loan Repayment Plan Would Extend the Same Income-Based Terms to All Federal Loan Borrowers", Antoinette Flores, Aug. 18, 2015

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