Christian Federal Student Loan Forgiveness
Federal Christian student loan forgiveness can be achieved in a variety of ways, achieving for both the student and the government substantial monetary and community benefits. Reduction and elimination of education funding is offered to graduates who are willing to work in several volunteer organizations. Americorps offers a program of volunteer service where the graduate can serve for twelve months and receive a stipend up to $7,400 plus $4,725 to be used toward federal student loans forgiveness. The services they provide in exchange for this benefit are: tutoring and mentoring disadvantaged youth, fighting illiteracy, improving health services, building affordable housing, and more.
With the Peace Corps, volunteers giving two years of service get deferment of Stafford, Perkins and consolidation loans in the federal programs. Also with the Peace Corps federal forgiveness programs the Perkins funding can be canceled at a rate of 15% for each year of service. Using this means of federal student loan forgiveness allows the graduate the opportunity to serve in 72 countries helping communities in a large number of worthwhile activities. VISTA (Volunteers in Service to America) volunteers work with private non-profit organizations to eradicate hunger, homelessness, poverty, and illiteracy in exchange for federal student loans forgiveness. A volunteer serving 1,700 hours receives $4,725.00 credit toward educational financial aid elimination. Another option is volunteering for the Army National Guard, where volunteers can receive $10,000 through their Student Loan Repayment Program.
Another area where federal student loan forgiveness is available is education. Full-time teachers working with low income families can have a portion of their Perkins funding forgiven each year: Years 1 & 2 = 15%, years 3 & 4 = 20%, and year 5 = 30%. Teaching disadvantaged children raises the quality of the entire community while the graduate benefits from increasing financial stability.
Students with law degrees can serve in public or non-profit positions and earn these benefits before launching a private practice. Health care professionals of all stripes--doctors, nurses, physical therapists, can receive student loan reductions for working in areas that don't have adequate medical care. These programs serve the dual purpose of recovering the costs of federal student loans, and providing services to those who otherwise would go without. Students looking for ways to serve American or foreign communities will gain far more than merely federal student loans forgiveness. The value of service to community is found in scripture: "The gold for things of gold, and the silver for things of silver, and for all manner of work to be made by the hands of artificers. And who then is willing to consecrate his service this day unto the LORD?" (1 Chronicles 29:5)
A federal student loan will help the individual who has limited resources afford the high cost of a university diploma with a financial aid package for full time studies. Without federal student loans only a few rare students could ever afford to study for top professional careers. These programs, courtesy of the U.S. government, create true opportunities for all students no matter how low their social economic level might be. They have excellent rates and features that are designed for youth at school and youth after graduation, unlike conventional lending programs that have no special arrangements built in. A person can find out if they qualify for a federal student loan by filling out a Free Application for Federal Student Aid (FAFSA) application. All packages are based on financial need from the results of this document.
One of the main funding programs is called the Stafford Loan which includes the total cost of education (tuition, room, board, books, and more) up to the limit the individual qualifies for. This federal student loan has a variable rate which changes every July 1. The individual can avoid uncertain variable rates in federal student loans when they consolidate all the debt that they accumulated over the years into one single debt with a fixed rate. Another type of federal student loan is called the Pell Grant which is available to undergraduate students only and does not have to be repaid. Perkins Loans are low-interest lending programs that must be repaid; the maximum annual amount is about $4,000 for undergraduate students and $6,000 for graduate students.
Funding through the government does have some eligibility requirements. The person must be a U.S. citizen with a valid Social Security Number, or an eligible non-citizen, demonstrating a financial need through the FAFSA. They must have a diploma or qualified substitute and intend to earn a degree in an approved program. Young men are required to register for the Selective Service. Finally, the individual will have to use the federal student loans only for educational purposes and maintain satisfactory grades once enrolled. Two factors that may prevent a person from qualifying for federal assistance are drugs and unpaid debt. An individual cannot be in default of any type of lending program and expect more money. Plus, they cannot qualify if they have been convicted under federal or state law of the sale or possession of drugs. "FAFSA on the web" can help individuals learn more about the particular eligibility requirements. The more information that is learned before agreeing to funding programs, the better the individual will be prepared for repaying these obligations in the future. "A wise man will hear, and will increase learning; and a man of understanding shall attain unto wise counsels" (Proverbs 1:5).
Federal Christian Student Loan ConsolidationsFederal student loan consolidation is a means of relief for students who find themselves unable to pay their existing student loans. Whether they are in default or have reached the point where they will soon be in default, this option is worth exploring. Once borrowers are approved for federal student loan consolidations, the old loans disappear. Payments are set up based on yearly family incomes, and if the family earns less than $900 above the poverty line, no payment is required at all. Perhaps the best feature of this plan is that the old loan will no longer be listed as a default on credit records, and collection efforts will cease. Applications are free, and the forms can be received by calling a number listed on the Internet. If the current ones are already in default when application is made for federal student loan consolidation, the student is required to either make three reasonable and affordable payments on the account or accept a payment plan based on income information obtained from the IRS.
Once the consolidation is granted, the individual is again eligible for other financial aid packages, including grants, that he or she might need to finish the education. Of course, it is wise to apply for a federal student loan consolidation before the original agreements are in default. This avoids the damage to credit rating that results from a default, which could include loss of tax credits and garnishment of wages and further penalties. There are some restrictions to these programs that must be understood. First, the borrower must certify that he or she could not get a Federal Family Education Loan (FFEL) with a satisfactory repayment schedule. Oddly, the borrower does not actually have to apply for the FFEL and, in fact, is discouraged from doing so when applying for consolidation. Federal student loan consolidations have lower interest rates and lower payments than does the FFEL.
It is in the borrower's best interest when paying off a federal student consolidation loan to pay more than the minimum required payments. As with any credit agreements, low or minimal payments will not cover the interest accruing, and the borrower ends up paying interest on interest, thus increasing the amount of money paid significantly. Borrowers have the option of seeking a deferment if necessary, and during that period the United States government pays the accrued interest. In all cases, these agreements have a cap on the interest that may be charged. Another advantage with federal student loan consolidations is that after twenty-five years of payments, the debt is forgiven. If there have been periods of forbearance or deferment when payments were not made, they do not count in the calculation of the twenty-five years, and when federal student loan consolidations are forgiven, the amounts of the loans have to be counted as income on the tax returns of the borrowers. "For I know the thoughts that I think toward you, saith the LORD, thoughts of peace, and not of evil, to give you an expected end," (Jeremiah 29:11).
Federal student loan consolidation programs are available for individuals with student loans who want to consolidate them into one lump debt. Not only does the program wrap all loans into one bundle with a single payment, there are also other advantages. Federal student loan consolidation programs allow the borrower to secure a fixed interest rate which will adhere to the life of the loan, and can never exceed 8.25 percent.
By using the federal student loan consolidation program, individuals will save themselves money by fixing their interest rate. Even if a student loan is in default, as long as there isn't a judgment against it or garnishment, the amount will most likely still qualify for consolidating. If the borrowed amount is in its grace period, or deferment or forbearance period, the borrower is eligible to utilize the federal student loan consolidation programs. However, using them could be a hindrance.
Depending on how badly the need to lower payments, using the federal student loan consolidation program could have the disadvantage of increasing the total interest payments because of the longer time period to pay the amount off. Sometimes it's important to do what is necessary in order to lower payments, though. Life can be difficult but choosing "rather to suffer affliction with the people of God, than to enjoy the pleasures of sin for a season" (Hebrews 11:25) is the better choice. In other words, it's better to have to pay more, and be able to make payments, than getting in a bind and not paying back loans. Consolidating can help borrowers do that.
Some may feel that the federal student loan consolidation program sounds complicated, but it's not as difficult to understand as it may seem. The payment plans can be figured by taking the weighted average of the interest rates on all amounts to be consolidated, and rounding that to the nearest one-eighth of one percent. To figure the weighted average of the interest rate to each lender, simply take each loan and multiply it by its interest rate. Next add the weight numbers together and then add the amounts together. Lastly, divide the weight total by the total amount and multiply by 100.
There are many online calculators which will figure the estimated weighted average interest rates so that borrowers will have an idea of what payments would be. Using a Christian federal student loan consolidation program makes it easier for the borrower to keep up with one debt instead of several from several different lenders. It also helps to have the interest rate locked. Both students and parents are eligible to consolidate and should take the time to seriously consider it.