Advice for Federal Government Employees During Shutdown
The federal government shutdown continues, and is now the longest in American history.
Around 800,000 federal employees are not being paid – and many of them have student loan bills that are due. Moreover, hundreds of thousands of other folks (such as independent contractors and private companies that primarily handle work for government agencies) are also being impacted.
Under increasing financial strain, people are starting to have trouble paying their bills. When it comes to your student loans, however, you may have some options.
Federal student loan borrowers may have a better option: income-driven repayment. Income-driven plans like Income-Contingent Repayment (ICR), Income Based Repayment (IBR), Pay As You Earn (PAYE), and Revised Pay As You Earn (REPAYE) allow for payments as low as $0/month if the borrower is earning no income.
Borrowers who are currently not on an income-driven plan can apply for one (and you can always switch back to your former repayment plan in the future). Borrowers already on an income-driven repayment plan can request a “recalculation” of their payments due to changed circumstances – and a significant drop in income certainly represents changed circumstances.
Income-driven repayment is often a better option than forbearance because it allows the borrower to maintain progress towards either loan payoff or loan forgiveness, it can have less severe interest consequences, and it is renewable for a longer period of time.
If you need assistant setting this program up please reach out to us, we can help.
Call us at (877) 552-1377 to schedule a free consultation.