After graduation your degree will look good on your wall; however the student loan debt is huge issue for many. With the avg debt load now topping $20,000, the idea of starting a business is not realistic. The sad truth is upwards of $400 or more per month in debt payments along with normal living expenses makes starting a biz not very likely.
Even if you don’t like Obama you gotta love his new student loan mandate; hence, starting a business may be possible. Note: starting in 2012, student loan payment amounts will be set based on discretionary income.
Grads will no longer have to make a payment that is higher than 10% of their discretionary income. For a student who had a $50,000 loan, they may have paid $350 or more per month but in 2012, that could drop to $100 or less.
How does it help the entrepreneur? If you’re planning to form an LLC, your business will take time to grow and during that time your income may come from a part time job or what you can pay yourself from your growing business. Since your payment will be based on this small amount, Washington has now made it possible for you to start a business while keeping your student loan payments low. Finally, after 20 years of loan repayment, the remaining balance will be forgiven.
It’s not quite that easy. Washington lawmakers only have the power to control payments levels on government sponsored loans. Private loans will not see a change under the new legislation. Also remember that as your business grows so will your loan payments.
If you have believed that starting your own business was impossible because of high student loan payments, that is about to change. The Obama Administration wants to make it easier for college graduates to form an LLC without having the overhang of unmanageable student loan payments. Look for more information about this at the beginning of 2012.