Over the recent years the student loan debt industry hasn’t just become more of an epidemic, but also has finally gained the attention of the government. With other economical aspects suffering at the hands of student loan debt and delinquency, many politicians are voicing their opinions for finding a solution. This week, President Obama took big steps towards providing relief for borrowers.
Call To Action
On Monday, President Obama called for Congress to extend the Pay-As-You-Earn program currently available to some borrowers. Obama wants some changes to be made to better reach more borrowers in need. Currently, only loans initiated between October 2007 and October 2011, who also meet income eligibility. The new extension in the program would allow for income-eligible borrowers with loans prior to October 2007 to possibly qualify for the assistance.
The program would allow for eligible borrowers to cap their monthly payment at 10 percent of their discretionary income, saving many hundreds of dollars a month. The program also forgives any remaining debt after 20 years of qualified payments. If approved, Obama’s extension of the program would also allow for those not eligible for the Pay-As-You-Earn program to become eligible for loan refinancing options.