Reviews of Debt Relief Programs

Indrajit Deshmukh Jan 5, 2019
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To cushion the economy and curb the rising debts the government introduced a $747 billion American Recovery and Reinvestment Act (ARRA) 2009. The changes brought about under this act came to be known as debt relief programs.
There are many fraud websites which claim to get you out of your debt with the help of federal programs constructed especially for debt relief. One thing is for sure, that the government does not pay off your personal debt like credit card or personal loans.
However, the government has enacted a few new laws to help the citizens better cope with their personal debts. The American Recovery and Reinvestment Act has pumped in almost $747 billion to revive the economy.
Under the ARRA the government increased its funding for federal education grants allowing students from low income families get higher education and a chance at gainful employment. Several changes were also made to the federal tax tables allowing hardworking citizens to take home larger pay checks.
Under this act $288 billion in tax cuts were provided, with $224 billion invested in entitlement programs, like unemployment benefits program. Another large part, about $275 billion were provided for loans, grants, government contracts. Government enacted the Credit Card Accountability Responsibility and Disclosure Act 2009 to curb mounting credit card debt.

Recovery and Reinvestment Program

Government has promised $40 billion as education grants to help general population continue higher education. Funding for community colleges and universities that cater to students from low income families is one aspect of this program. The government believes that education will play a key role in helping families with their debt situation in the long term.
Here is a look at government debt relief program to help you understand how it will help personal debt situation. The government has provided indirect stimulus, to empower US citizens to pay off their debts, through better education, which will generate better career opportunities. It has also invested in infrastructure projects to create more jobs.

Education Grants

The government has promised financial support to community colleges so that they can improve their infrastructure and provide a conducive learning atmosphere. The funding will also enable these colleges to hire new staff and retain good teachers. Historically Black Colleges and Universities (HBCUs) will also benefit under this new program.
Colleges will get funding to introduce industry certified courses which will enable students to be job ready upon completion of the course. Federal Pell Grants which help a large percentage of students from low income families will benefit under this debt relief program, initiated by the government.
The Pell grant amount for the year 2011-12 is up to $5,500, the award amount depends on the expected family contribution of the student and the cost of education. To avail this grant you need to fill the Free Application for Federal Student Aid form which is available on the federal student aid website.
A total of $100 billion dollars will be invested in the education sector, to fund programs like Head Start, IDEA special education and support education of homeless children and students from low income families.

Credit Card Act

Credit Card Accountability Responsibility and Disclosure Act of 2009 aims at putting brakes on the unfair tactics used by credit card companies. Card companies are prohibited from arbitrarily changing interest rate without giving the customer at least 45 days notice. Card companies have to send the billing statements to the customer 21 days prior due date.
The government has also decided the size of the font to be used on the contract and it is also mandatory for companies to have their contracts online for government scrutiny. It is also stipulated that companies have fixed due dates and if that date falls on a weekend or government holiday it be shifted to the next working day.
Card companies are also prohibited from levying heavy late payment charges and over due fees. These changes will enable people to get out of their credit card debts. This comprehensive act will go a long way in securing credit card debt holders and curb unfair practices, enforced by credit card companies.

Tax Table Changes

Changes were made to federal tax tables so that hardworking people take home larger pay packets, to pay their debts. One of the reforms is 'Making Work Pay' tax reform which allows upto $400 in tax credits, married couples can make upto $800. Home owners will get benefit upto $1,500 for energy efficiency if they upgrade or use energy efficient appliances.
Individuals who purchased new vehicles up to $49,500 can get tax refund for the sales tax they paid and in some states appropriate fees where sales tax is not applicable. Homeowners who entered into binding contracts on or before April 30 can claim up to $8,000 refund from the IRS.
The government has also introduced the Health Coverage Tax Credit (HCTC) for pensioners in the age group of 55 to 65. For more details regarding specific tax credits visit the Internal Revenue Service (IRS) website.
The federal debt relief programs are aimed at providing a long term solution to the economic crisis plaguing America today. Analysts have considered its pros and cons, and they believe that these remedies aren't enough but at least they are a good start.