Student Loan Debt Solution
For those who don’t know … The Student Loan Burden now has a solution!
According to The White House (We the People Website), Action to Reduce the Burden of Student Loan Debt has been taken.
Our income based repayment (IBR) policy is a prime example of doing just that: it allows students to repay student loans based on the income they make, rather than the standard 10-year repayment plan. Currently, IBR allows hundreds of thousands of borrowers to cap their loan payments at 15% of their discretionary income and have all remaining debt forgiven after 25 years of payment. This program allows students to reduce their loan payments by hundreds of dollars a month in many cases, while keeping the loans in good standing. For example, a student borrower with an income of $30,000 and a loan debt of $25,000 will see their monthly student loan payments reduced by $116.
To give students additional help, Congress enacted a proposal in 2010 to have IBR borrowers cap their payments at 10% instead of 15% and have all their debt forgiven after 20 years instead of 25 years. These changes were scheduled to go into effect in 2014. However, the Administration is announcing today that these benefits will go into effect two years earlier, in 2012, to provide an even greater benefit to students in college now.