Resources to help NC borrowers repay and manage student loans

Student over-indebtedness

Overwhelmed borrowers in North Carolina are hoping for relief. Will it happen?

Student loans can be overwhelming. If you think this way, you’re not alone — 1.3 million people in North Carolina have student loan debt totaling $48 billion, according to the Center for Responsible Lending.

While there is no perfect debt relief solution, there are resources to help borrowers manage and repay their loans. Here are some of the government and nonprofit programs available to residents of North Carolina.

Government programs

Cancellation of civil service loans

What is it: A federal government program that forgives student loans for full-time employees of any level of government (federal, state, local, or tribal) or 501(c)(3) organizations non-profit.

  • Only Federal Direct Loans are eligible for forgiveness under this program. Loans from the Federal Family Education Loan Program and the Federal Perkins Loan Program are not eligible, but restructuring them into a direct consolidation loan could make them eligible.

How it can help you:

  • The Department of Education has suspended some rules for eligible payment types until October 31, in a bid to bring more people closer to loan forgiveness.

Teacher loan forgiveness

What it is: A federal government program that forgives student loans for teachers who have worked at least five consecutive years at a low-income school or other educational organization.

How it can help you:

  • The program forgives math, science, and special education teachers up to $17,500 on subsidized and unsubsidized Direct Loans and subsidized and unsubsidized Federal Stafford Loans. Teachers of other subjects are eligible for a rebate of up to $5,000.

Income Oriented Repayment Plans

What it is: An income-tested repayment plan takes into account your income and family size to make monthly payments more affordable. The federal government offers four types of income-tested repayment plans. Here’s a breakdown of each:

  • Revised Pay As You Earn Repayment Plan: Anyone with Direct Subsidized, Direct Unsubsidized, Direct PLUS Graduate Student Loans, or Direct Consolidation Loans who have not repaid any PLUS loans to their parents is eligible. Other types of federal student loans can be consolidated to make them eligible. You pay 10% of your monthly discretionary income — the money left over after paying your taxes and other necessary living expenses like a mortgage or rent — over 20 years for undergraduate loans or 25 years for college loans. graduate studies.

  • Pay As You Earn Repayment Plan: The same eligibility criteria as the previous plan apply, although some of the consolidation options are different. You pay 10% of your monthly discretionary income, up to what you would pay under a standard 10-year repayment plan. The repayment term is 20 years.

  • Income-Based Repayment Plan: In addition to loans eligible under the previous two plans, subsidized and unsubsidized Stafford loans, FFEL PLUS loans for graduate students, and FFEL Consolidation loans not repaying PLUS loans to parents are also eligible. Perkins loans are eligible if consolidated. You pay 10% of your discretionary income over 20 years if your loans are after July 1, 2014, or 15% over 25 years if they are before. Both payment plans are up to but no more than what you would pay under a standard 10-year repayment plan.

  • Income-contingent repayment plan: Anyone who qualifies for the first two plans is eligible, as well as people with direct consolidation loans who have repaid the PLUS loans to parents. See the list of eligible loans if they are grouped. You pay the lesser of 20% of your discretionary income or what you would pay on a repayment plan with a 12-year fixed payment. The repayment period lasts 25 years.

Non-profit organizations

Student Debt Crisis Center

What it does: The organization works on two fronts: policy efforts to encourage government officials to tackle student debt and provide borrowers with resources to better understand and repay their loans.

How it can help you:

InCharge Debt Solutions

What it does: The nonprofit provides a range of debt relief services, not all of which are focused on student loans. Its website explains the different types of debt and the resources available to help them.

How it can help you:

This story was originally published July 8, 2022 06:00.

Gabe Castro-Root is an intern in the business office of The Charlotte Observer. Originally from San Francisco, he studied journalism and sustainability at American University in Washington, DC

About Judith J. George

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