Some pay more for student loans than rent
Income-driven repayment plans exist because millions of borrowers are facing real financial difficulties.
More than half of borrowers say their payments on student loans are higher than what they're paying for health insurance, according to a recent survey conducted by the Student Debt Crisis on behalf of Summer.
About 30 percent reported owing more each month on student loans than their rent or mortgage, according to the survey.
And 65 percent of those surveyed said they had less than $1,000 in their bank account.
Since 2009, the U.S.Department of Education created several new income-driven repayment plans. Such programs helped graduates caught in the tough job market during the Great Recession and afterward.
An income-driven repayment plan can help reduce the risk that the student will default on their student loans and damage their credit ratings in the future.
Typically, an income-driven repayment plan extends repayment periods from the standard 10 years to up to 25 years and, if certain rules are met, the remaining balance can be forgiven at the end of that period.
The popularity of such plans has grown. About 24 percent of student borrowers repaying their federal student loans were doing so with income-driven plans as of June 2016, according to a U.S. Government Accountability Office. And it has grown to 29 percent as of June 2018.
That compares with 10 percent in June 2013.
Experts say many borrowers would be better off with income-driven plans.
Excerpt from USA Today November 8, 2019: "Paying off student loan? Repayment options you should consider"
Let StuLo help your employees to navigate the confusing process of Federal student loan consolidation and income-based repayment plans.
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StuLo is an employee benefit and association-member benefit program that is focused on: financial wellness, student loan debt relief, and credit repair services. The benefit program takes a wholistic approach to providing a financial wellness benefit for all employees and members—not just a benefit to help student loan holders only. The aggregation of financial-related benefits includes: general financial coaching and online tools, concierge services to help with federal student loan consolidation enrollment, private student loan refinancing marketplace, concierge services to help with credit repair, accident disability insurance, and identity theft protection. As an alternative to an expensive, employer-funded student loan repayment assistance benefit, StuLo provides significant benefit value at little to no cost to the employer. https://stulowellness.com