What’s the Deal with Obama Student Loan Forgiveness?
It all started in 2010 when Barrack Obama signed the Health Care and Education Reconciliation Act of 2010. By doing so he applied a reform to the Direct Loan Program. .
Source: The Department of Education
Obama Student Loan Forgiveness Program isn’t a real program. Well it is, but it isn’t actually called Obama Student Loan Forgiveness. That is a term thrown around to describe the William D. Ford Direct Loan Program. So, why do so many people refer to this program as Obama Student Loan Forgiveness Program? It all started in 2010 when Barrack Obama signed the Health Care and Education Reconciliation Act of 2010. By doing so he applied a reform to the Direct Loan Program.
When Obama signed the Act, it stated that the federal government will cease to give subsidies to private lending institutions for federally backed loans. As well as, borrowers with loans that were taken out in 2014 will qualify to make payments of just 10% of their discretional income. These new borrowers (loans taken out 2014 or later) would also qualify for loan forgiveness in 20 years as opposed to 25 for old borrowers. Of course, as long as you make all your qualified payments.
If you are looking for forgiveness but you don’t have direct loans you can always consolidate your loans into direct loans. Consolidation can simplify your loan payments if you have multiple servicers or if you took out lots of loans over time. However, this will reset your loan terms. But you need direct loans to qualify for the William D. Ford Federal Direct Loan Program or as it is unofficially known, the Obama Student Loan Forgiveness Program.
The department of education website explains how each of the programs works. They also have a glossary of terms to try and explain terms to the common borrower. These terms and this process can be difficult and confusing. Ameritech Financial works with these programs daily. Our agents and staff are experts in these programs and work diligently to ensure enrollment for thousands of clients. Ameritech Financial makes it easy for their clients to lower their monthly payments and work toward loan forgiveness. They even can consolidate your loans if they require it.
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