Students are expected to repay their student loans after graduating and after five years of paying off their debt, but the amount of money that they can earn depends on a variety of factors including their income, whether they’re working and whether they have the financial resources to work for it.
The Government will release a new repayment plan for students next month, and there are many questions that students can expect to ask about it.
Here’s what you need to know.
What is a student loan?
A student loan is a loan you can borrow to help you pay for college and university.
The interest on your loan is the principal amount of your loans, plus interest on any remaining balance.
The principal amount is the amount you have to repay each month over the five years that you’re paying it off.
The remaining balance is usually the amount that you can’t earn.
If you earn less than the principal and interest, you can be forgiven the balance.
How much do students need to repay?
A minimum of 30 per cent of your annual income must be used to repay your loan.
The maximum you can repay is 75 per cent.
The minimum amount that a student can earn for a full year is $18,000.
A full-time student earning $20,000 a year can be expected to earn $3,000 each month for six months.
How can you be forgiven?
A good way to avoid paying off a student debt is to have a plan to pay it off as soon as you can.
If your repayment plan doesn’t include the repayment of your student loans you’ll be eligible for forgiveness if you have a good-enough credit history and you have sufficient income to repay the debt.
For example, if you make $20 a week and owe $1,500 in student loans it’s possible to repay $1.50 in student loan debt, for example.
It can also be possible to pay off your debt on your own terms.
This is called a credit card repayment plan.
Some student loans have the same repayment terms as a credit cards repayment plan, but it’s usually much easier to do so because the repayment terms are different.
Are there any limits on the amount a student may be able to earn?
There are some financial limits on what a student cannot earn.
For some loans, it’s not possible to earn more than the amount your student loan was repaid.
For other loans, such as student grants, the limit is capped at $18.25, for instance.
If a student’s earnings are less than $18 per week they may be eligible to receive a deferment to pay their student loan off over the next five years.
If they’re over $18 a week, they’ll be able earn up to $50,000 for six years and may be allowed to defer their debt for up to 10 years.
Can I defer my student loans to repay other debts?
Some students may be offered a deferral to repay debt from their other debt, such the housing allowance, child benefit or income support.
They can do this for up of two years from the date of the deferment.
Some students also have a student deferral allowance that can be used as part of a repayment plan to repay student debt from other sources, such a credit union or government-sponsored pension.
If this is your plan, you may be encouraged to take advantage of the money you’ve been able to save from other debts.
However, if this is the only way you can get a loan that’s good enough for you, you should contact your bank about whether you can make repayments to other debts on your behalf.
What can I do if my repayment plan isn’t enough?
If your plan isn�t enough, you’ll need to find another plan that’s easier to repay.
There are a variety the repayment plans available to students.
If the plan you’re considering doesn�t provide enough for your financial needs, you could apply to a higher interest rate.
If that’s the case, the repayment plan you�re considering will be calculated on a rolling basis, meaning that you could get less or more than what you’re eligible for.
However there are some restrictions on how much money you can earn.
You can’t make more than 30 per of your income or $18 for each $1 you earn over the 10 years, and you cannot earn more that the maximum that you�ve been able earn for five years or less.
Some repayment plans are less generous than others, which can make it hard for students to qualify for help.
If my plan isn��t enough and I can�t pay it back, what should I do?
If you can�’t pay your debt off, it�s possible that you may need to seek help from a financial counsellor or credit counsellant.
If it’s clear that you won�t be able pay your loan off, you need the support of a financial planner or credit counselling provider.
Some counsellors may offer debt relief,