21 May How Many Years Until Student Loan Debts are Forgiven?
Loan Forgiveness Terms to fit Your Time FrameLet’s explore the five most common student loan debt repayment plans and the time schedules required for repayment. Repayment plans differ based on the time frame and income (cash flow), so you can find the one that fits your needs. We’ll also discuss the impact that student loan debt forgiveness programs may have on your taxes, so you’ll know exactly what to expect when that loan forgiveness finally comes through. Some of these plans may feel like they take forever for loan forgiveness (25 years is a long time, we admit!) However, plans that take low income into account often result in such low monthly payments that a sizeable portion of the loan ends up being forgiven. Let’s check out the options.
1. ICR (Income Contingent Repayment Plan): 25 YearsThis repayment plan works a little differently than others we’ll go over below. First off, the ICR has no initial income requirements attached to it. This plan allows any eligible student borrower to make their payments using this plan. The ICR is designed for student borrowers who will be pursuing jobs with lower salaries (such as the public service sector). It does this by tying the monthly payments to these three factors:
- borrower’s income
- family size
- total amount borrowed