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The obama loan forgiveness plan or also known as the William D. Ford Direct Loan program is a program of the government that came as a reformed Direct Loan program of 2010. It is a program wherein President Barrack Obama signed the Health care and Education Reconciliation Act of 2010. Private loan borrowers are exempted from these programs as it is meant for federal student loans.

 

When a student avails of this programs, he/she can have lot of advantages. For example, the student borrower will now have the ability to consolidate all their federal loans into a single new loan. The student bower also will have the option to choose what repayment scheme is suitable for him/her. Below are some of the options being offered by the obama loan forgiveness program

 

Student Loan Forgiveness at the end of the term. If for example a student acquired an income contingent, pay as you earn repayment plan or income based plan, the plan balance at the end of the term will be forgiven if the student still has a remaining balance. Depending on which repayment plan you choose and when the loan was originally applied, the loan term for this program is between 20-25 years. The amount to which the loaner is forgiven depends on the original amount that the student borrowed, it will also depend on how much the family is earning, the fluctuation rate of the earnings will also be considered during the payment.

 

Another type of program is the Public Service Loan Forgiveness. Those individuals that work in the public sector are eligible to this loan forgiveness program. The qualified payment schemes can be through IBR, PAYE or ICR. The public worker that would avail these program can ask for loan forgiveness after paying 10 years or after giving 120 total payments. This is much better compared to the previous rule which is 20-5 year's forgiveness. But many of the people are not aware that this type of program is available for their disposal. But take note that they should be in the Direct Loan Program to avail these type of forgiveness scheme. Many people though confused the Public Service Loan Forgiveness program with the Obama Student Loan Forgiveness. To learn more about loan forgiveness program, you can visit https://en.wikipedia.org/wiki/Debt_relief.

 

The last type of Forgiveness program offered by the government is the Teacher and Disability Forgiveness. Although this program is not part of the Student Forgiveness Program, it is available for public use. These type of program is exclusively meant to help teachers by reducing the loan amount or by completely discharging federal student loans for disabled individuals.