Thanks for the clarification.
No problem. I think Obama is just trying to take credit for more “change” than he actually signed into law. He wants future students to thank him for creating an “entitlement” that was largely already in place. All this really does for students is lower some students’ minimum payments (depending on their income and the size of their loan, a lot of borrowers are paying less than 10% anyway), shorten the “forgiveness” date from 25 years to 20 (most student loans are amortized over 10 years), and expand the Pell grant program (which of course has been around for decades).
The worst part of this “student loan reform” is the cost and the fact that the projected “savings” are as big a lie here as they are in the rest of the health care act.
I don’t even particularly care that much about ending the private student loan program. Federally subsidized and guaranteed “private” loans were hardly the stuff of free-market capitalism anyway.
One thing this bill doesn’t change is the fact that student loans are generally non-dischargeable in bankruptcy, unless the debtor can show “undue hardship”, which is a pretty high bar. I was a bit surprised by that.