Worried about paying back your student loans? The federal Consumer Financial Protection Bureau now offers an online “student debt repayment assistant” tool that can help you evaluate possible options.
The tool doesn’t actually accept applications for changes to your loans. But by asking four basic questions, it provides a guide to the steps you can take to explore various alternatives.
The tool first asks if you have federal (government) loans, nonfederal (private) loans or a combination of both. The answers are important because that determines what options are available. If you aren’t sure, the tool links to the National Student Loan database, where you can search for loans made to you and determine if they’re federal or private.
The database also provides the name of the loan servicer — the company that collects your payments — if you don’t know. That is also important because ultimately the tool advises you to call your servicer (which may be different from the company that originally made the loan). The tool explains the various options for you to ask about, like a deferment or a forbearance, and the pros and cons of each.
The site also explains the Department of Education’s “income-based repayment” option, which can limit monthly payments on federal student loans (but not private loans) if your debt is high compared with your income.
The tool provides a chart with estimated payments based on income and family size, and provides a link to a calculator on the Education Department’s Web site that can more precisely estimate what your monthly payment would be under such a plan.
Neither the consumer bureau’s chart, nor the Department of Education calculator, has been updated to reflect President Obama’s proposal, announced on Wednesday, to reduce the income-based repayment cap to 10 percent of income, for some students graduating next year and thereafter. Rather, they still reflect the current cap of 15 percent. A spokeswoman for the Education Department said its calculator will be updated after the president’s proposal goes through the necessary regulatory review process.
If you try the tools, let us know in the comments section if you find them helpful.
Article source: http://feeds.nytimes.com/click.phdo?i=6e1cfe13e1eb01c0b3f30b9a553fc21d
Speak Your Mind
You must be logged in to post a comment.