Don’t Borrow More Than You Need
Depending on your income level and your FAFSA results, you may be eligible for a higher loan amount than you need to cover tuition charges. It is true that money is tight for most students but what you borrow now is eventually going to be due at a later date. If you have a credit on your student account after your grants and loans are applied, you can always ask your college to cancel the remaining loan amount.

Buy Books off Campus
If you buy books from your college bookstore, you are going to pay full retail price for them. Most colleges will allow students to use their financial aid or student loans to pay for their books. This may seem like an easy and quick way to obtain your learning materials but you may get stuck paying interest on those books in the end. For the most part, you are only going to use the books once and there is little sense in going into debt over the cost of books. Rather than purchasing the books from your campus, try half.com, ebay.com or other Internet websites that sell used college textbooks.

Pay the Interest on Your Loans While Your Are in School
Depending on the amount of student loan debt that you have, the interest payment is likely to be a few dollars a month. By paying the interest payment on your student loans every month, you are likely to save hundreds if not thousands of dollars once you have to start paying the loans back.

Stick with Government Backed Loans
It can get very tempting to accept a loan offer from a private banking institution to help cover college related costs. Private loans can look even better if your grants and federal loans are not covering your day to day living expenses or other necessities while you are in college. While it may sound good, private loans typically come with higher interest rates, stricter terms and no grace period.

By taking preventative action while you are still in college, you could save yourself a ton of debt later down the road. With the current state of the economy, it is more important now than ever to plan for your financial future.

Easy Ways to Manage Your Student Loan Debt before You Ever Leave College is a post from: Saving money tips - frugal living tips

As a student borrower you are saddled with certain responsibilities just as you complete negotiating your loan. To maintain a good standing with the lender loan obligations need to be fulfilled diligently. Even one missed payment is an indication of delinquency to the people who may be reviewing your application for a home or a new car in the years to come. Ignoring your loan repayments could place you in default records. However, there can be circumstances where it may become genuinely difficult for you to make timely repayments. In such a situation you need to get in touch with your lender immediately. There are many ways in which you may get payment relief.

In many cases you may not be required to make repayments untill you graduate. The problem is that even after graduation there are many students who may not find suitable placement within the grace period. In other cases even a secured job may initially not pay enough to meet loan obligations along with covering other necessary expenses, which may lead to loan repayment issues. Keeping this in mind there is usually a six month grace period before the repayment schedule kicks in after your graduation.

You need to choose one from a number of strategies available that may help you in repaying your student loan. Nearly all lenders and service providers offer several options by way of different repayment plans and you should check with your lender about the availability of plans. A few of them are discussed below.

Graduated repayment- In this a long term repayment plan option spread over 12 to 30 years based on the total amount borrowed. For example, loans below $7,500 can be extended up to 10 years, $7,501 to $9,999 up to 12 years and so on, with 30 years repayment period for loans of $60,000 and above. You begin by making smaller repayments which gradually increase every two years. Under this option the monthly repayment cannot be less than 50% or above 150% the installment payable under the standard repayment option. It should also be equal to at least the interest amount payable subject to a minimum of $25.

Standard repayment- Standard repayment- For Federal Stafford and Federal PLUS loans the standard repayment schedule is structured over a period up to 10 years with the rate of interest calculated at 8.25%.The minimum monthly repayment installment for both loan types is $50 per month.

Extended repayments- In extended repayments you need to make smaller monthly repayments over a longer repayment period that can extend from 12 to 30 years depending on the amount borrowed. However, the total interest paid over the life of the loan is much higher. For example, if you borrow $20,000 @ 6.8% interest the effect of switching from standard repayment to extended repayment would be:

Income sensitive repayment- This is applicable to a certain class of borrowers and takes into account a specific percentage of the borrower’s income to calculate the monthly repayment.

Loan consolidation- This provides the facility of consolidating many types of loans into a single loan with just one repayment to be made on a monthly basis on a low rate of interest.

Prepayment option- This option offers a very good opportunity for reducing the overall cost of the loan. Most private student loans incorporate terms that allow you to payoff a part of your loan before the scheduled repayment begins. This can be done at any time during the life of the loan.

Additionally, there may be certain programs offered by your state that can reduce or even cancel your loan altogether if you are performing certain services that include teaching and nursing. You can verify the availability of such programs by checking with the state agency for post secondary education of your state.

A guide to paying back a Student Loan in the US is a post from: Saving money tips - frugal living tips

Giving you the chance to pay off all of your student debts and transferring them into one easy to manage loan often seems like an ideal solution. However, there are various things that you need to consider before you take out a consolidation loan. While they can help, there are times when taking out this type of loan could be a very bad idea!

You Will Be Paying Back More Than You Are Now

By taking out a student consolidation loan, you will be paying back quite a lot more than your current debts. For example, if you currently owe $15,000, if you take out a consolidation loan you could end up paying back at least $25,000. Of course it all depends upon the lender and the interest charges, but no matter who you go with, you will always be paying back more than you currently owe.

The reason behind this is because a consolidation loan extends the term of the loan which lowers your monthly repayments. The lower monthly repayments allow you to manage the loan better than you currently do and it can seem like the ideal solution. For once you will have a little money left over to spend on whatever you want to spend. However, you need to understand that you will be paying back more money in the long run.

It Could Affect Your Chances of Getting a Mortgage

When you are a student you don’t always consider the long term implications of a loan. You simply think about the here and now and that can prove problematic in the long term.

If you are 25 now for example, you will more than likely want to settle down in your own house within the next ten years. With many consolidation loans you will be paying them back for a minimum of ten years. That would take you up until the age of 35 and only then will you be able to start thinking of buying your own place. For many people their consolation loans last for fifteen years or more. That is really something that you need to consider as a loan could affect your chances of being accepted for a mortgage.

Overall consolidation loans can help. If you know exactly what you are getting into then it can be an excellent way to manage your monthly debts. However, you should think about the negative implications of a consolidation loan too if you want to make the best possible decision for you.

What to Consider Before Taking Out a Student Debt Consolidation Loan is a post from: Saving money tips - frugal living tips

It’s relatively easy (and common) to hate your student loan payments. Student loans by nature of their being need to be repaid long before the graduating student has had a chance to set down roots and get comfortable with their finances. When you are in your forties and fifties, with a solid career, good income and support of family life, a twenty thousand dollar loan is no big deal. Unfortunately, when you are in your early twenties, you have yet to achieve more than your diploma and the bill that comes with it.

Losing perspective, you start to begrudge your student loan. You might have doubts and wonder if you should have gotten that degree. This is especially true for those in the first year or so after graduation, when you are happy if you can just find a job, let alone a career. However, you shouldn’t get too downtrodden about your student loans, because they are actually a good debt.

Yes, that’s right – a good debt. It’s simple mathematics actually. Anything that has a bigger dividend than the initial investment is good. In terms of student debt, your initial investment is the loan and the interest you pay, but the return on your investment comes in the form of better wages, benefits and more stability over a lifetime.

Okay, so perhaps it doesn’t feel that way right now. You look at your meager furnishings and dream about the sofa set and stereo system you hope to have — someday. You pray your transmission doesn’t give out any time soon, so you can keep up with the overworked, underpaid level entry job that is only loosely related to your chosen field. You spend your time padding your resume, applying for jobs and listening half-heartedly to people who tell you “everyone must pay their dues”. On top of it all, you have no spare cash for a Friday night out, because every penny you have leftover goes directly to your student loan.

Someday will come. I promise. Millions of people all over the globe, in different countries, in different fields, in different cultures have slaved and scraped their way from the very bottom to work their way up from a job to a career. Your education has prepared you for it. You paid for more than just knowledge and expertise, you paid for structure and discipline. All night study sessions taught you how to do what it takes to get things done. Pop quizzes taught you how thrive under pressure. That nasty professor that drove you crazy prepared you to handle yourself among colleagues in the workplace.

There is absolutely nothing that can replace your post secondary education and the experiences that accompany it. Even the student loans themselves help you set and achieve a goal. The loans are a burden; true. The debt load can be painful and heavy at times, also true. Nevertheless, in the end, it is still a good debt. One that will reward you countless times over, and in years to come, you will encourage those who look up to you to take on the same debt.

So instead of grumbling about your student loan payments, try to see the bright side. Your student loan bought you a good education. That good education, in turn gives you an opportunity for a bright future. After all, the best investment anyone can ever make is an investment in themselves.

The Bright Side of Student Loans is a post from: Saving money tips - frugal living tips

How many people have graduated post secondary school saddled with an outrageous debt from student loans, lines of credit and credit cards, only to spend the next several years slaving to pay it all off? What about those who simply cannot pay it?

Once you have used up all your available interest relief and refinance options, you may be pondering a declaration of bankruptcy in an effort to free yourself from the chains of student loans. You’ve heard that student loans aren’t included in bankruptcy and that is true, but only for the first ten years.

If you are still carrying your student loans past the decade mark, you do have a couple of permanent options. Granted, these options are not for the faint of heart, and really are a last resort for an overwhelming debt.

Option One: Beg for forgiveness. If all you owe is your student loan, forgiveness of the loan basically means it is written off. If you have reasonable grounds, such as severe financial hardship or disability, you can apply for loan forgiveness. There is no guarantee, and the determinations are made on a case-by-case basis, after you must have exhausted all other avenues for relief. This will also appear on your credit report as a bad debt. However, if you qualify, it will mean your student loan account is closed. Permanently.

Option Two: Go Bankrupt: The reality of the situation might bring you to this option. Aside from student loans, you might also have credit card bills, cell phone bills, car loans or other debts that are so far beyond your ability to pay that you have no other choice. As long as your student loan is over ten years old, you may claim it in bankruptcy. Again, this solution is permanent and brings your credit rating to the bottom end, but most people in this situation have already damaged their credit quite badly anyway.

If you’re considering the bankruptcy option, the smart thing to do is talk to a professional. Companies like BDO Dunwoody are bankruptcy trustees, and can look at your overall financial situation and advise you of your options before you commit. This is important, since the fine print of student loans might prevail over the bankruptcy. Refinancing, or extending amortizations might have given your student loan a new lease, meaning the ten-year mark was adjusted to be ten years from the refinance date.

Escaping your student loan voluntarily by way of forgiveness, bankruptcy or even a consumer debt proposal is more than just a dollars and cents solution. Yes, there are long term repercussions, such as credit rating, loss of equity in property, and liquefying all assets, such as retirement savings. However, putting the money aspect aside, the emotional relief of escaping the debt load is often a life altering experience.

Granted, it’s a tough love solution, and initially, you may not feel much pride about it, but overall the anxiety over payments, calls from collectors and threatening letters will be part of the debt you are freeing yourself from. Furthermore, it’s a chance to start over. In time, credit can be rebuilt. In the meantime, you will have the opportunity to relearn how to manage your cash flow, balance your checkbook and decide what kind of life you are working toward. Life after student loans need not be an ongoing tragedy, so when all else fails, you have every right to protect yourself and unburden the debt.

Can Student Debts be Escaped…? is a post from: Saving money tips - frugal living tips

You see them on campus, right out there in broad daylight. Surrounded by a group of happy, smiling fools, proudly waving a free t-shirt, maybe a keychain, sometimes even an i-pod. The predators are using this grown up candy to lure unsuspecting post-secondary students into the crazy world of credit cards.

Starting college or university is often compared to starting kindergarten, and the same lessons apply. Don’t take candy or gifts from strangers. DANGER! If Johnny jumped off a bridge, would you do that too? DANGER! Don’t believe everything you hear. DANGER! Just because you want it, doesn’t mean you need it. DANGER!

Credit cards on campus can be a dangerous trap for the unsuspecting student. The enticement of what for many is their very first un-parented application for credit makes the student vulnerable to entering a world they do not fully understand. Lack of experience about interest rates, payment schedules and credit ratings can turn that first credit card into a traumatizing event.

Having said that, there is a flip side. Long term, your credit rating will be rewarded for a properly managed credit card account. When you stop being a student, the credit card you opened, if handled with care, will boost your credit history for years to come. Healthy credit standing means better interest rates on things like car loans and mortgages, along with other benefits, such as discounts on insurance.

So, before you join the crowd in line to get your student credit card (and the free gift), take stock of your situation to make an informed decision.

• Payments: Look at your debt situation. Can you really afford another payment? You will probably tell yourself that you will only keep it for emergencies, but somehow, student credit cards always find their way into use. Between student loans, food and rent, can you honestly afford another payment? If the answer is no, walk away from the nice person at the sign up table.
• Read the Fine Print: Once you sign the application, you have agreed to the terms and conditions of the cardholder agreement. So, what exactly are you committing to? You cannot rely on the salesperson to tell you what it says, you must read it yourself. Flip the page over and read the fine print. Is there an annual fee? What is the interest rate? Is there an introductory offer? If so, what happens when it expires? If reading it gives you a headache and it all sounds like gobbledy-gook, put the pen down and back away from the table! You can apply for a credit card with fewer loopholes at any bank.
• Forget about the Free Gift: People who make all their financial decisions according to the freebies and bonuses usually end up badly in debt or bankrupt. Forget about the free gift and base your decision on whether or not it’s actually a good deal (no annual fee, low interest rate, no teaser rates). If you think it’s a good opportunity, then go ahead and apply, and take the free gift for what it is, an extra perk.
• Withstand the Peer Pressure: If you have doubts or you are in any way uncertain, don’t let your friends talk you into it. If you miss out on this deal, you need not worry, another one will come along sooner than you think.

When it comes to handling student debt and finances, student credit cards are usually the most expensive form of credit and the toughest to pay down. Therefore, if you’re already feeling the burn from you student loans, it’s best to just say no to student credit cards.

Danger: Student Trap Ahead is a post from: Saving money tips - frugal living tips

While navigating the many turns on the road to post secondary education, you will undoubtedly come to a financial institution offering student lines. Sometimes they are offered as an alternative to using government loans to finance the bulk of your education, sometimes they are offered as an extra resource. So, what is a student line anyway?

A student line of credit is a revolving line of credit, designed with the struggling student in mind. It differs from a student loan in many ways, the most important being – lines are offered by banks and financial institutions, rather than through federal student aid programs.

Once upon a time, banks were in charge of student loans. These loans were guaranteed by the government, so if the student defaulted, the bank would still be paid. In recent years, student loans have reverted to federal holding, so all student loans are issued by and repaid to provincial, territorial or federal programs. Not wanting to miss out on the interest payments and profitability that can be found by financing post-secondary students, financial companies began aggressively offering student lines.

A student line of credit has a preset spending limit, much like a credit card. Also like a credit card, it is revolving, so you can use it, pay it down and then use it again, as long as you don’t go over the maximum. The interest on a student line is based on prime, which makes it variable. If you have no balance, you pay no interest.

Most student lines have a deferment (grace) period of six months to one year after exiting school. Depending on the financial institution, deferment means one of two things. The first requires interest only payments to be made each month, even while the student is in school, and for the grace period. After the grace period, the student is required to make a larger payment that is a principle and interest payment combined. The second defers both interest and principle payments until after the grace period, at which time, principle and interest payments begin. Be careful though, as interest will likely be quietly accruing on the balance while you go about your daily student life.

Student lines of credit can be either the saving grace or the final nail in the coffin, depending on how you handle it. Those who cannot withstand the temptations of a credit card should absolutely NOT apply for a student line. The open, revolving nature of student lines makes it quite easy to use for less than educational expenses; say a birthday gift for your girlfriend. Yes, it is true, there is no watchdog on student line spending patterns, so the student is free to use it as they see fit. It’s quite often a little too much financial freedom for an eighteen year old.

Since student lines are issued by banks, it also means they are not part of the federally sponsored relief programs offered specifically for student loans. Therefore, if you find yourself in need of interest relief, refinancing or extended terms for your student loan, it will not include the student line of credit. Don’t get me wrong, these types of programs may be available for your student line too, the difference is, you have to go to the bank and negotiate that yourself. The good news is, the banks live in fear of default, so they tend to work with you to find a suitable solution.

As long as you remain disciplined in your spending habits, a student line of credit can work to your advantage. It’s easy to use, generally with debit cards or cheque privileges attached, and it’s nice to have as a source of emergency funds for the unexpected. Unplanned expenses (like all those parking tickets), can be paid from the student line of credit instead of with your grocery money, so you can still eat dinner and your car will not be towed.

What is a Student Line Anyway? is a post from: Saving money tips - frugal living tips

A friend of mine recently called me to pick my brain about co-signing for a student loan. It seems her niece enrolled in a course that is not eligible for the OSAP program, so she was looking for other options. Dear old Daddy, under pressure from his new wife, is not willing to assist the young girl with her problem. So, what can she do but talk nice to other relatives in the hopes of charming one into becoming her co-signer?

My friend in this case, has been married for almost twenty years, and her first question was a biggie. Does her husband need to sign too? Short answer: NO. As long as she has the income to support the payments if niece can’t come up with the cash, then there is no reason to need more than one co-signer. However, this is where co-signing can get a little complicated.

For all intense and purposes, only the people who are applying for the loan or line of credit will have any responsibility for payment. But what happens if one or both default? Does this hurt an innocent spouse who had nothing to do with the loan to begin with? Yes, it does.

Co-signing is a tricky road to navigate, which is why many loving relatives are reluctant to sign on the dotted line. The trouble only comes if a payment is missed. Let’s say my friend co-signs for her niece, and a year from now, the student niece runs late making a payment. The next month, student runs late again, and the following month, she misses it altogether. Once the third payment hits the thirty day past due mark, the bank contacts the co-signer to make good on the payment, which she does.

The co-signer will undoubtedly have a pep talk with the student about proper communication regarding payments, resulting in a promise from the student to contact the co-signer if she cannot make the payment on time. Co-signer, being diligent, will also likely contact the bank to make certain they will call her the instant they sense a late payment. Problem solved. No more payment troubles.

3 months later, co-signer and hubby apply for a car loan. Hubby has excellent credit, but low and behold, his wife has an issue on her credit report, in the form of three bad payments on a student loan, for which she was a co-signer. The missed payments have impacted her credit score, and even if no further payments are missed, they will remain on her credit report for seven years.

Not only is this a credit problem, but in most cases, it has now become a marital problem.
Wanting to help a young person make their way through school is a noble and worthy act of kindness. However, good intentions don’t always equal good results. This shouldn’t deter students from looking for a potential co-signer, nor should family resist the desire to help out. While being a co-signer does have some risk, that risk can be minimized to protect both parties.

• Get Monthly Statements: Both the primary borrower and the co-signer are entitled to have monthly statements mailed to them. The co-signer, however, is usually optional, and they must make sure they request statements be sent.
• Make the Payment Account Joint: Usually it’s easiest for the student to have the account where they do their regular banking, so set up a joint account for the payments to come from. Again, the co-signer must request statements be mailed to them.
• Make it Automatic: Set the payments to automatically come from the joint account. Furthermore, if the student is working, set up automatic transfers into the payment account for each payday.
• Build a nest egg: Add a little to the account each week before payments even come due. Having a nest egg built up in the account will ensure that any snafu’s such as long weekends or holds on deposits won’t interrupt the payment schedule. Since the account is joint, both parties will be aware of any withdrawals, which will probably keep the starving student from dipping into it without checking with the co-signer first.

For many students, having a co-signer for a student loan is the deciding factor for whether or not they will continue school. There is no shame in asking someone to help get the loan, as long as the entire process, from application to payment is handled maturely and does not jeopardize the co-signers credit, future or family life.

Student Loan Co-signer: Power or Problem? is a post from: Saving money tips - frugal living tips

After dragging yourself out of bed for early morning classes, studying by the light of the computer screen and surviving on hot dogs and stale coffee, you finally make it to graduation day. The world is yours, you’ve paid your dues and now you are an honest-to-goodness grown up. Your life is yours, you can party like a rockstar, sleep in till 4 pm, eat popcorn for dinner or sow any number of wild oats as you please.

Excuse me, but what colour is the sky in your world?

For those who don’t live in never-never land, you wake up before the alarm, drag yourself into the shower and chug a cup of java as you walk to the subway. When you are not a work, you spend you’re free time looking for a better job and checking your laundry for loose change that will tide you over until payday. When you do get paid, after making the rent, utilities and student loan payments, you discover you have about $73 left to live on until your next paycheque. You look longingly at the calendar with some desperate hope that two weeks will suddenly become two days.

Your parents drop by to visit, bringing a charity grocery basket with them. “Why don’t you just move back home?” they ask. You insist that you’re fine, you might even come up with excuses to appease them. Where would you store your stuff? It’s too far from work. They don’t have the space, etc, etc, etc. This ritual continues for several months until you finally break down and admit you can’t afford to be on your own just yet. It’s a cold and unwavering fact that being on your own is not a question of ability to handle yourself, so much as it is a factor of economics.

It’s called boomeranging. Adult children who are forced to return to the family homestead due to financial burdens. The good news, moving back home at twenty something, while it may feel like a blow to your ego, is not nearly as bad as you think it is. In fact, it’s becoming the national norm. We all know at least one forty year old who has zero ambitions to ever leave the comforts of the family home, but there’s no reason to think you will end up like that. For many young adults, returning home is a mature choice to get student loans and other debts under control, so they can stand on their own two feet.

That being said, keep a few things in mind:

• Set a goal for your stay. Accelerating your student loan in lieu of paying rent, saving for a down payment on a house, or looking for a better paying job are good incentives and give you a “move out” target to aim for.
• Do your chores. Granted, you’re not 12 anymore, but that’s what makes it even more important to pitch in. Your parents shouldn’t have to chase you to help out, since you are an adult. Talk to your parents or volunteer for certain duties, such as taking over the yardwork or laundry. Doing your bit toward the responsibilities of the household will go a long way in maintaining your adult independance and help your parents respond to you as their adult child, and not just a child.
• Don’t act like a teenager. Be respectful and mindful of your parents space. Cranking the stereo at three in the morning is a little selfish, not to mention rebellious. If you like it loud, invest in some good headphones.
• Don’t assume what’s theirs is yours. Just because you are old enough to drink, doesn’t mean Dad wants you to drink all his beer. Buy your own, and occasionally offer one to the old man. Same goes for the car, the remote control and other amenities that aren’t covered under “free room and board”.
• Don’t introduce your date at breakfast. It’s your parents’ house and therefore you must comply with their comfort levels when it comes to dating and overnight guests. If you are thinking of bringing your date home for the night, clear it with Mom and Dad first. If you’re not comfortable enough broaching the subject beforehand, you have no business expecting your parents to go along with it.

Returning home for an extended stay can be rewarding both financially and emotionally. Your parents will be happy to support you while you pay down your student loan debt and increase your income, plus as long as you are considerate and mindful, you can interact with your parents at a whole new level. Many families look back on this experience with fondness and rejoice at the closeness they would have not found otherwise.

Boomeranging Your Way Out of Student Debt is a post from: Saving money tips - frugal living tips

We’ve all heard the stories or seen the headlines: “23 Year Old Pays Off Student Loan With Google Pay Per Click”. How about “22 Year Old Woman Auctions Off Her Virginity to Pay Masters Degree.” Some ideas leave you awestruck, some ideas leave you dumbstruck. It does, however, bring to light the ever growing cost of higher education and the need for creative and aggressive solutions to keep the poverty stricken student from becoming a poverty stricken graduate.

There is a major battle waging in the post graduate circuit. On one hand, government and communities are in desperate need of the careers and services grads can offer. The pay is not the greatest, but the opportunities are abundant. There is no community that is not in need of more teachers, doctors, nurses, pharmacists and so on. Furthermore, charitable and non-profit organizations still need accountants, coordinators, business managers, legal practitioners and so on. Let’s not forget, affordable daycare, affordable housing, affordable transportation…well, you can see all the careers that are available. Add to that the desire to make the world a better place, and it’s puzzling how all these posts remain empty.

The problem: student loans. The moral intention of students to change the world and bring about equality to all is noble, yet, unfortunately not affordable when you are facing down the burden of debt from your schooling. This circumstance forces students away from low paying jobs where they are desperately needed. In short, it’s all about the paycheque being high enough to pay off that student loan.

Several years ago, a thoughtful and interesting suggestion came to the surface. A bold solution to both the professional shortage and the student loan dilemma. Instead of having set payments for student loans based on the amount borrowed, why not make payments based on post graduate income? This idea is not without merit and the benefits to every spectrum is viable.

• Students would have an easily budgeted payment plan, with a percentage of income going directly to student debt.
• The default rate on student loans would be greatly reduced.
• All student loans repayments would be on a level playing field.
• Automatic payroll deductions for loan payments would allow students to increase the amount of payment, therefore paying down loan faster.
• Students would feel less pressure to pursue only high end salaries, and more likely to start careers closer to home or in underserved communities.
• Communties would benefit from more students beginning their careers where they are needed the most.
• Student loans will do their job; allowing people to enter careers, not force them into bankruptcy.

After many years of controversy and debate, inome based student loan payments are finally coming to light. In the United States, federal student loans are now eligible for income based repayment (IBR). Based on earnings factored against the poverty level, low income graduates can make payments according to their annual salary. After 25 years of payments, the balance (if any) will be forgiven. Direct Loan borrowers who choose to work in public schools or with non-profit organizations will have their student loans forgiven after only ten years.

In Canada, the Debt Reduction in Repayment (DRR) program allows low income students to reduce their student loan principle up to three times to a maximum of $26000. Eligibility is based on family income and it’s geared to assist low income graduates based on the current poverty levels. Since this action lowers the actual loan amount permanently, it also lowers the required minimum payments.

While neither of these programs cover the entire student loan struggle, it is a start for those in serious financial turmoil. It would be nice to see the entire student loan payment system overhauled and all payments be income based. Higher wage earners would pay more, while lower wage earners would catch a break. Not only would it enable students to pay off their student loans more efficiently, it would increase vital services where it is needed and allow students to control their career choices, and look for jobs that will make a difference, and not just a paycheque.

Finally, Student Loan Plans that Make a Difference is a post from: Saving money tips - frugal living tips