It looks like there may finally be some relief for Americans riddled with student loan debt. President Obama announced on Monday an expansion of a program that helps student loan borrowers manage their debt.
According to White House Officials, Obama will expand the criteria for an alternative repayment program under this new reform, which caps monthly payments for certain federal student loans at 10% of a borrower’s discretionary income.
On Monday, the president signed an order directing the Education Department to expand the existing plan that lets borrowers repay no more than 10% of their income each month. The plan (or “Pay As You Earn” program), currently restricted to those who began borrowing after October 2007, will eventually cover all borrowers under this order. The change will go into effect in December 2015 and would not apply to those who consolidated federal and private loans through a private lender.
“Lower tax bills for millionaires or lower student loan bills for the middle class?” Obama said. “This should be a no-brainer.”
In his endorsement, Obama also called out congressional Republicans for what he described as ‘backing tax breaks for the wealthy while opposing plans to reduce interest rates on college loans.’
Many consider this a #win for those currently straddled with student loan debt post-graduation. And at a current rate of $30,000 per average borrower at a four-year university, this new reform just may be the help needed.
For full details, head over to CNN.
Urbanites, what are your thoughts on Obama’s campaign to aid student aid? Will you be benefiting from this new reform? Share your thoughts in the comments section below.