President Obama’s relief program for those with student loans is now officially launched. The president announced this more generous repayment program last October, and borrowers will be able to start applying by year’s end through the online federal student loans portal. This program is sure to make it easier for graduates to manage student loan debt, especially if they find themselves underemployed.
About the Program
Under the Pay as You Earn plan, some college graduates will be able to limit student loan repayments to 10% of discretionary income, with remaining balances forgiven after 20 years of repayment. Eligible students will have to have originated at least one federal student loan between October 1, 2011 and September 30, 2012 or later and must have taken no loans before the 2008 fiscal year. As such, only current students or recent graduates will likely qualify.
Students who do not qualify for the new program can still apply for the older relief program. This program limits payments to 15% of discretionary income and forgives outstanding balances after 25 years.
Concerns About the Program
Mitt Romney is opposed to this program, stating that it will increase the national debt. While it is true that the program will cost around $2.1 billion over a decade, the Department of Education can make up the cost of the program through loan consolidation and other changes.
Many people are also worried that not enough people are aware of the program. The online portal will make it easier for many eligible borrowers to register, but many of those who are eligible are not aware of the options that are available to them. According to the Institute for College Access and Success, a nonprofit organization, it is necessary to get the word of the program out to as many students as possible because this program offers vital relief when students need it most.