New Federal regulations allow a Federal Perkins Loan to rehabilitate a defaulted loan. The borrower must request this. To rehabilitate, 9 consecutive, on time monthly payments must be made (to be determined by the Long-Term Loan office). Once the loan is rehabilitated the following will take place: (1) The loan will return to regular status, restoring rights and benefits of the promissory note (2) Credit Bureaus will be instructed to remove default from credit history. The borrower may rehabilitate a loan ONE TIME ONLY. For information please call the Long-Term Loan office at (616) 331-2256 or email us at firstname.lastname@example.org
PERKINS LOAN CANCELLATION CHANGED
Effective October 7, 1998 the 1998 Amendments of Higher Education changed eligibility requirements for loan cancellation. All Perkins Loan borrowers are now eligible for cancellation regardless of when their loans were disbursed. You may be eligible if you are working full time in the following fields: Nursing; Medical Technician fields; Teacher of Mathematics, Science, Foreign Language; Bilingual Education and Special Education; as a Law Enforcement Officer (enforcing criminal law); or providing services: As a Qualified Professional and Provider of Early Intervention Services (as defined in section 672(2) of the Individuals with Disabilities Education Act that are provided to infants and toddlers with disabilities); to High-Risk Children (Individuals under the age of 21 who are low-income and at risk of abuse or neglect, have been abused or neglected, have serious emotional, mental, or behavioral disturbances, reside in placements outside their homes, or are involved in the juvenile justice system.
STUDENT LOAN INTEREST DEDUCTION
Beginning January 1, 1998, taxpayers who have taken loans to pay the cost of attending an eligible educational institution for themselves, their spouse, or their dependent, generally may deduct interest they pay on these student loans. The maximum deduction each taxpayer is permitted to take increases from $1,000 in 1998 to $2,500 in 2001 and thereafter. The following table summarizes the yearly increases. Year Maximum Deduction 1998 $1,000, 1999 $1,500, 2000 $2,000, 2001 and thereafter $2,500. The deduction is available only for interest payments made during the first 60 months in which interest payments are required on the loan. For more information go to: www.irs.ustreas.gov/hot/not97-605.html
BANKRUPTCY LAW CHANGE
Effective October 7, 1998, student loans or educational debts are no longer dischargeable except for undue hardship.