Obama Proposes More Affordable Student Loan Payments
“The student loan proposal announced by the President today could not come at a better time, as
the weak economy and high unemployment are making it harder than ever for people to make
monthly payments on their student loans. It improves upon the Income-Based Repayment (IBR)
program created by Congress in 2007, which was supported by a broad coalition of student,
parent, loan industry, and higher education groups to make college more affordable and
“President Obama’s plan would improve IBR by lowering the cap on federal student loan
payments from 15 to 10 percent of discretionary income, and forgiving any remaining debt after
20 years of payments, rather than the current 25 years. Two-thirds of four-year college graduates
in 2008 left school with an average of more than $23,000 in student loan debt.
“IBR is targeted to those with high student debt burdens relative to their income and can lower
monthly payments by hundreds of dollars in many cases, helping borrowers avoid default and
pay down their debt in a manageable way. For example, a single person who owes $33,000 in
federal loans and makes $30,000 a year would pay about $110 a month under the president’s
proposal, compared with about $380 a month under a standard 10-year repayment plan. Under
the current IBR formula, this person would owe $170 a month.
“Nonprofit and government employees, as well as others who work in public service, can get
their remaining debt forgiven after just 10 years in Income-Based Repayment.
“As an early proponent of IBR, we strongly support this proposal as a way to make the program
even more helpful to responsible borrowers. This is a well-targeted and well-timed change that
would help people who are struggling to stay afloat financially.”
For more information about IBR or Public Service Loan Forgiveness, go to http://www.IBRinfo.org.
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The Project on Student Debt is an initiative of the Institute for College Access & Success, an independent, nonprofit
organization working to make higher education more available and affordable for people of all backgrounds. For
more information see http://www.projectonstudentdebt.org and http://www.ticas.org
http://projectonstudentdebt.org/files/p ... BR_STA.pdf
Remember, sadly, most of us haven't borrowed directly from the US Gov't and aren't really eligible for this program. However, Sallie Mae's program is almost exactly like it.