Since 2014 Grad Plus loans are up over 119%. PayForED has added new functionality to their student loan repayment tool to provide a solution for high student loan borrowers. The Student Loan RePayer now has a delayed refinancing function and early payment feature to directly address many problems that these borrowers face.
The solution was designed specifically for professionals that have high student loans but do not qualify for Public Service Loan Forgiveness. These borrowers are typically: dentists, some doctors, lawyers, MBA graduates, and other similar professionals.
Solution to Student Loan Borrowing Trend
The decision to take on graduate school debt is normally a good one since many of these careers are high-paying careers. The problem many face is the transition from student to their new career. Most are not able to support their initial loan payment under traditional methods. Their option is to use one of the Income-Driven Repayment (IDR) methods for a short period of time and refinance in a few years.
The question is which one is the best one to select based on my specific situation?
Selecting the Best IDR Option
For borrowers with high student debt face another issue – life events. Many are married already or will get married during their student loan repayment years. The IDR methods use a person’s or couple’s Adjusted Gross Income from their taxes to calculate their monthly student loan payment. This calculation is very different than a traditional loan such as a mortgage or auto loan.
The problem is that the information sources are fragmented. The loan servicers are not allowed to discuss tax filing strategies and the tax professionals do not understand loan repayment. This is a critical gap since more than 56% of student dollars are now repaid using an IDR method.
PayForED’s Repayer provides an estimate of all these options and the various combinations in one place. These projections are critical for the high debt borrowers since they need to discover the best current payment option and what their debt will be in the future. A simple adjustment could be worth thousands of dollars a year.
Delayed Student Loan Refinancing Enhancement
The new delayed student loan refinancing feature helps high debt borrowers create a plan. It is custom to their debt, tax filing status, and repayment options. Now, the borrowers can easily compare their best current repayment options and estimate their refinancing amount. It allows for better financial decisions.
The biggest advantage of the PayForED tool is that it all the steps reside in one place and it is simple to use. Other solutions require multiple steps. As an example a person would need to get the tax filing analysis done in one software and then input these numbers into the repayment software multiple times. The next step would be for the borrower to run the amortization to get the projected debt balance in the future and then input that number in another calculator to see what the payment will be when they refinance at a later date. The Student Loan Repayer simplifies this entire process because all these functions are embedded in the tool.
In addition to the enhanced refinancing function, a new loan forgiveness analysis and summary were developed. This allows the borrower to consider the refinancing and the end-of-term loan forgiveness options. It includes the projected amount forgiven and the tax liability of the forgiven amount after the 20 or 25 years.
New Additional Payment Feature
As more companies consider a student loan repayment benefit, a new student loan paydown feature was also added. This can mirror a company payment or a person’s own additional payments. With the various new legislation including numerous student loan repayment initiatives, this feature can help all borrowers create a better loan repayment plan.
Delayed Student Loan Refinancing Summary
As student debt continues to rise and the demand for a more educate workforce increases, borrowers will need better information on repayment and all their options. These solutions need to be dynamic and customized.
The addition of the delayed refinancing function complements the existing advantage of the PayForED Repayer. These features include the tax estimator, tax filing payment comparison, immediate refinancing, Public Service Loan Forgiveness, and many other features.
Having the best student loan repayment plan will improve your chances of a brighter financial future.