New program could reduce student loan payments

San Francisco Chronicle ^ | June 25, 2009 | Kathleen Pender

[Lorianne]

Starting July 1, many people having trouble repaying their federally guaranteed student loans might be able to choose a new, more lenient payment plan.

The program, called income-based repayment, will be available to more people and almost always result in smaller monthly payments than an existing program for stressed borrowers called income-contingent repayment.

The new program sets monthly payments based on adjusted gross income and family size. Unpaid principal and interest is generally added to your loan amount. Any debt remaining is wiped out after 25 years - or after 10 years if you work in the public or nonprofit sector.

If you are unemployed, low-income or have a very large debt, you could qualify. "People who need advanced degrees to get low-paying jobs" are prime candidates, says Edie Irons, a spokeswoman for the Project on Student Debt.

There is no income limit. Even people making $100,000 could qualify if they owe more than they earn in a year.

The payment cap works like this: If you earn less than 150 percent of the poverty level for your family size, your payment will be zero. If you earn more, your monthly loan payment will be capped at 15 percent of your annual income that exceeds 150 percent of the poverty level, divided by 12.

[kittycatonline.com]

New program could reduce student loan payments

It's a specially crafted program available to all students with a current student loan. Each month you submit a regular payment, and the total amount owed will be reduced accordingly. Over a few years time, you will eventually pay the entire amount owed plus interest, and you will be released from your obligation.

[Right Wing Assault]

But why do we have to pay? Isn’t a college degree a constitutional right, just like health care, food, and a ‘green’ car? And maybe music and videos? And booze and drugs? I thought obama was going to do more for us.