1. What are the types of student loans?
There are generally two types of student loans:
Federal student loans: These are loans issued by the U.S. Department of Education, which include Direct Subsidized Loans, Direct Unsubsidized Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Private student loans: These loans are provided by private lenders like banks, credit unions, and online lenders. Terms vary by lender.
2. What is the difference between subsidized and unsubsidized federal student loans?
Subsidized loans: These are need-based loans, where the government pays the interest while you’re in school, during the grace period, and during deferment.
Unsubsidized loans: These are not need-based, and interest accrues while you’re in school, even during periods of deferment.
3. What is the Public Service Loan Forgiveness (PSLF) program?
Under this program, it forgives the loan balance of qualified federal student borrowers who work at qualifying public service jobs. Following 120 payments of qualifying, monthly payments through a qualifying repayment plan, some or all the remaining loan balances may be discharged.
Read Also:
- https://lawstrategix.com/10-questions-and-answers-about-school-regulations/
- https://lawstrategix.com/20-key-questions-to-understand-special-education-rights/
- https://lawstrategix.com/8-questions-about-teacher-employment-laws-explained/
4. Will student loans go away in bankruptcy?
Generally, student loans are not easily discharged in bankruptcy. However, if you can prove that repaying your student loans would cause undue hardship, using a legal process called an adversary proceeding, you may be able to discharge them. This is a tough process, and most borrowers do not succeed.
5. How do I apply for income-driven repayment plans?
Income-driven repayment (IDR) plans determine your monthly payments according to your income and family size. To apply, you will need to file an application through your loan servicer. You might need to supply proof of your income, including pay stubs or tax returns.
6. What happens if I default on my student loan?
If you default on a federal student loan, the government can take aggressive actions such as garnishing wages, withholding tax refunds, or taking part of your Social Security benefits. You may also face collection fees. It’s important to work out a repayment plan or explore options like rehabilitation or consolidation to avoid default.
