Posted on 06/28/2009 5:06:49 PM PDT by BenLurkin
Repaying a student loan could soon be a little less painful.
Starting this week, anyone with a federal student loan can apply for a program, run by the Department of Education, that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.
Eligibility for income-based repayment (IBR) is determined by a person's income and loan size. A calculator at http://www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.
"It's a way to borrow for college without going to the poor house," said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.
The program stems from the Education Department's College Cost Reduction and Access Act, signed in 2007, which authorized the creation of a new income-based repayment plan for both Federal Family Education Loan (FFEL) and Direct Loan borrowers on all Stafford and graduate PLUS loans.
Monthly payments would amount to less than 10 percent of income for most of the estimated 1 million people expected to enroll, experts say. Payments would never exceed 15 percent of any income above about $16,000 a year (or 150 percent of the poverty level).
Those who earn less than $16,000 would not have to make any monthly payments.
The new payment option is intended to provide relief for those who earn modest salaries and struggle under the weight of student loans for years on end. By stretching repayment over a longer period, monthly payments are kept at a reasonable portion of income, though most people would not see any savings on the total cost of the loan.
(Excerpt) Read more at finance.yahoo.com ...
Sallie Mae repayments were reasonable for graduates a few years ago at 2-3 percent interest. However, about 2003 or 2004, the interest jumped to 7 or 7.5%.
If the marxist’s get control I could forsee the government forcing those in debt to work for them to pay off the loans.
so this means that the “poor” will pay nothing for school...add that to all their grants — free college. just make stupid decisions and wind up poor and the government will give you free healthcare, college, you name it.
"Every government interference in the economy consists of giving an unearned benefit, extorted by force, to some men at the expense of others."
-- Ayn Rand
What a fool I was paying mine off.
Just like making my mortgage payments on time and never taking equity out of my home.
*DOH* I could have gone on a worldwide cruise and lived like a king!
Responsibility: It’s for suckers.
Why bother spending 4+ years of your life earning a degree if it isn’t going to help you land a decent paying job?
Maybe it is time to stop bailing out people who went to college for the wrong reasons.
Ditto that. I think I finished paying GSL’s from graduate school (mid-1980’s) in 1997. It was a reasonable deal then, but since that time tuition has risen to outrageous levels, even at state schools. Why? Because there is an endless supply of students who can borrow the tuition. Obama has claimed that we need to replace loans with financial aid (direct grants) - which just enlarges the pool of post secondary students, which just fuels tuition inflation.
later
You can go to Harvard and pay $50,000 per year to become a public school teacher or social worker. Now that cost is passed on to taxpayers.
Yep. “Public service” is going to be defined as any government job, or a job for a non-profit doing liberal-approved things.
We won’t just be subsidizing teachers and cops; we’ll be subsidizing gov’t payroll parasites and left-wing activists.
I just got a nursing degree, started when it was a guaranteed job. Now new grads can’t get hired. If/when I ever do, I wonder if I’ll qualify? Not that it would help much ; I’m only 5k in debt officially, considerably more to my mother, and I’m not stiffing her.
(1) Abolish all federal grants and scholarships. Let the private sector dole out grants to deserving students
(2) Federal aid should only be used for tuition, books and other applicable course-related supplies
(3) The government should create incentives so people can borrow directly from their lenders instead of going through the Dept of Ed. The interest rate could be lower, or some of the money borrowed could be tax-deductible for example.
So in other words all those art history majors who racked up six figure student loan balances and who are now barristas at Starbucks will be rewarded for wasting the government’s money on useless degrees.
Your choice.
How nice for them that I can SO Wicked afFORD to do this!!!!!!!!
Sensible public policy doesn’t reward people for getting useless degrees. We need graduates who can help America compete in the global economy.
Especially in light of the fact that we are headed for demographic implosion within 15-20 years.
A degree is not a free ticket for a job. Even people with law degrees and engineering degrees are unemployed today.
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