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Students given more options for loan repayment

PHOENIX -- Two programs could make it easier for students to repay their student loans: the Income-Based Repayment Plan and the Pay as you Earn Plan.

"The income-based repayment plan limits the amount [of your highest monthly payment] to 15 percent of your disposable income," said Mike Sullivan of the Take Charge America Credit Counseling Service. "That is very helpful."

The plan offers forgiveness after 25 years if students haven't repaid it yet. The Pay as You Earn Plan is similar, except that it's capped at 10 percent of a person's income with a 20-year forgiveness plan.

With each program, students can be taxed on any amount that you're forgiven. Students must have a partial financial hardship to be eligible for either program.

Sullivan said these plans give students some options.

"When you add these to the public service plan that's been available for a number of years, it means that there is hope now, at least for dealing with student loans," he said. "It's something that students need to be aware of and need to think about. Those who are having student loan problems need to talk with their servicer and do some research and find out if they are eligible for any of these plans."

With both the income-based and earning plans, students will pay more over time than they would for the standard 10-year plan.

You'll find a comparison of student loan repayment plans at studentaid.ed.gov.

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About the Author


Years with the company: I started on January 2, 2006.

Education: I was born in San Antonio, Texas, but we moved to Phoenix when I was one-year-old in 1957. I grew up here and graduated from Alhambra High School and attended Phoenix College.

Family: I am married to my wife Rene', who is a librarian in the Washington school district. During free time, I may be found playing basketball in the driveway with my son, Devin. He's also keeping me busy with school, Little League, and playing in chess tournaments around the Valley.

Favorite food: Lots of favorite food, but our favorite restaurant is Fajitas.

Favorite spot in Arizona: The Little America Hotel in Flagstaff.

Favorite news memory: We have to go back to October 15, 1979. I was a country music air personality at KROP Radio in Brawley, California, when we had a 6.7 earthquake. Thankfully, there were no deaths and only minor injuries, but the entire community was pretty freaked out and listening to the station on their transistor radios. I would not want to go through an earthquake again, but it sure was a great night to work in radio and see how it can make a difference in people's lives.

First job: Working as a stringer for 'The Arizona Republic' at high school football games. My first real job was flipping burgers at the old Sandy's Hamburgers at 51st Avenue and Indian School Road. My first radio job was as announcer at KALJ radio in Yuma in 1977.

First concert: Doug Oldham gospel concert in the 1970s at the old East High School in Phoenix.

Favorite sports team: Phoenix Roadrunners minor league hockey. My dad took me to a game when I was in grade school, and I was hooked. I wanted to be a radio hockey play-by-play man. I used to take my cassette recorder and sit up in the rafters of the Coliseum and do play-by-play. It was great later in life to also take my son to Roadrunners games. Too bad the team just folded, I'll miss them. (Going to the Coyotes is fun, but they're not "my" team.)

Outside interests: My family and I are active in our church - Northern Hills Community Church in Phoenix. We enjoy going to movies, sporting events, and like to vacation at the Beach Cottages in the Pacific Beach area of San Diego. And I love to play catch, basketball, football with my son.

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