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What are my options with student loan debt?

Follow these tips to lower your payments or even get your loans forgiven

What are my options with student loan debt_.jpg

Got student loan debt hanging over your head like a stubborn rain cloud? We know that once you toss that graduation cap in the air, reality comes knocking at your door, demanding those loan payments. But don’t worry because WorkMoney's got your back! 

We’ve partnered with Savi to help you manage your student loan repayments. We've got a whole bunch of options up our sleeve, from flexible repayment plans to deferment and even forgiveness for those who qualify.

Federal repayment plans

When it comes to federal student loans, there are two types of repayment plans you can choose from: traditional ones and income-driven ones. The rules can get a little complicated, but we’ve broken down the big takeaways. But which one's right for you? Well, that's where our partners at Savi come in.

Savi is a loan repayment app that'll help you figure out which plans you qualify for and which ones meet your financial situation and goals. 

Traditional repayment options

  • Standard repayment plan: You'll make a fixed monthly payment over a 10-year term. No surprises, just steady progress toward paying off your loans.
  • Graduated repayment plan: Your monthly payments start off on the lower side and then increase every 2 years over the 10-year loan term. This repayment plan could be a good option if you’re not earning a high income right now, but you expect to start earning more soon.
  • Extended repayment plan: If you're looking for some breathing room with your monthly payments, this plan might be up your alley. You'll start off with a low monthly payment, and every 2 years it'll increase for the 25-year term. It's like the graduated repayment plan, but over a much longer term. 

Income-driven repayment options

Income-driven repayment programs can be a great choice if you're just starting out in your career or if you're saddled with high student loan balances. They take your income into account and make things more manageable. Monthly payments can be as little as $0 for low-income individuals. Here are the options we've got for you:

  • Saving on a Valuable Education (SAVE, formerly called REPAYE): With SAVE, your monthly payment is set at 10% of your income, and you'll be on the road to repayment for 20 years if you did your undergrad, or 25 years if you tackled grad school. People under 225% Federal Poverty Level (FPL) can have a monthly payment of as little as $0. People making over 225% of FPL can save at least $1000 a year compared to other income-driven repayment plans. It will also be made even more affordable next July. One of the rules that will be set in place is that if your principal loan was under $12k, you could have the remainder of your loans discharged completely after 10 years of qualifying payments!
  • Pay As You Earn (PAYE): Similar to SAVE, PAYE also sets your monthly payment at 10% of your discretionary income, which is the difference between your income and 150% of FPL. But here's the twist: There's a cap on the payment amount, so it won't go above the standard payment plan amount for your loan.
  • Income-Based Repayment (IBR): If you took out loans after July 1, 2014, IBR could be a good option for you. Your monthly payments will be 10% of your discretionary income, and the repayment term will be 20 years. Now, for loans taken out before July 1, 2014, the monthly payments will be 15% of your discretionary income, and you'll have 25 years to pay them off. 
  • Income-Contingent Repayment (ICR): ICR gives you a bit of flexibility. The repayment term is 25 years, and your monthly payment will be the lesser of what you'd pay with a fixed amount over a 12-year term or 20% of your discretionary income. 

Federal loan forgiveness plans

With the Federal Government's student loan forgiveness, If you meet certain criteria, you might just be able to kiss that loan goodbye. Check out these forgiveness plans:

  • Repayment Length Forgiveness: Some borrowers will now have their loans automatically forgiven. Borrowers who took out $12,000 or less are now eligible for total forgiveness after 10 years of making monthly payments. The number of years until loan forgiveness increases by one year for every additional $1,000 borrowed in the original loan. This rule will apply to people who have already been paying off their loans, meaning you could have your loans forgiven automatically, if you have already been in the repayment process and meet the criteria.
  • Public Service Loan Forgiveness: If you're working full-time for an eligible non-profit or government agency, this one's for you. After making 120 monthly loan payments on an Income-Driven Plan while working at the qualifying agency, you could qualify for forgiveness. 
  • Teacher Loan Forgiveness: Calling all full-time teachers! If you've put in five full and consecutive years teaching in a low-income Title I elementary or secondary school, with at least one of those years being after the 1997-1998 school year, you're in luck. Depending on the subject you teach, you could qualify for up to $17,500 in loan forgiveness. 

Loan discharge and cancellation

Sometimes life throws unexpected curveballs, and that's where loan discharge and cancellation programs come into play. These programs offer complete forgiveness for your loans, but they typically apply to unforeseen or extenuating circumstances. Let's dive into a couple of them:

  • Total and Permanent Disability Discharge: Now, if you find yourself in a situation where you become totally or permanently disabled, you might be eligible for a loan discharge. Whether you have a direct, FFEL, or Perkins loan, this program can come to your rescue. You can qualify through the Department of Veterans Affairs, the Social Security Administration, or with a doctor's note and documentation.
  • Closed School: If your school closes while you're still attending or shortly after, you may be eligible to discharge up to 100% of a direct FFEL or Perkins loan.

Learn more about Savi

Savi is here to help you manage your student loan debt and empower you to forge a path to a brighter financial future.

First things first, they have a useful student loan repayment calculator. You can see how much money you'll be putting back into your pocket each month. 

Once you've got an idea of those savings, it's time to put them into action. That's where Savi comes in. It's like having your own personal financial advisor at your fingertips. Savi's student loan repayment tool is there to guide you every step of the way.

You can enroll in repayment plans, make those monthly payments without breaking a sweat, and even work with a finance professional to make sure you're on the right track. 

With Savi’s Essential plan, you have access to:

  • Digital Application with Savi e-file enrollment
  • Personalized support from Savi student loan experts
  • Personalized repayment calculator
  • Forgiveness eligibility detection
  • Basic federal enrollment guide
  • Student loan dashboard
  • Live educational workshops