Introducing The Next Generation Of Leaders And Thinkers

President Obama’s Plan for Student Debt

Federal-Student-Loan-Options-bigstock-President-Obama-40747615-Project-Done-Lori-Youngston-2-1024x680

President Obama’s Thoughts on Helping Americans Manage Student Debt:  The Paye As You Earn (PAYE) program

 

“I’m only here because this country gave me a chance through education. We are here today because we believe that in America, no hardworking young person should be priced out of a higher education. This country has always made a commitment to put a good education within the reach of young people willing to work for it.”

President Barack Obama, June 9, 2014

 

Higher education is one of the most important investments a person can make for themselves, and in turn is a vital element of our nation’s economic progress.  White House research shows that currently 11 of the 15 fastest-growing occupations require a postsecondary education. Thus, President Obama takes education of American’s seriously!  

But, higher education is expensive.  According to the Federal Reserve Bank of New York, outstanding student loan debt in the United States lies at about $1 Trillion with around $900 Billion of this in Federal student loan debt.   According to the Federal Reserve about 40 million Americans are carrying some student loans and about 70% of students graduate college with debt.

A major focus for President Obama, since he took office, is to help Americans afford college by investments in grant and scholarship aid through Pell grants and tax credits, keeping interest rates low on federal student loans.

This past week his focus was on building awareness for the Pay as You Earn (PAYE) plan.  President Obama is aiming to enroll two million more people in Pay as You Earn by this time next year.  PAYE works like this:  If your federal student loan payments are high compared to your income, you may want to repay your loans under an income-driven repayment plan. Under PAYE plans, if you’re a borrower who needs help with your debt, you’ll never have to pay more than 10% of your income towards student loan payments, and you can reduce your monthly payment to as low as $0.

Most federal student loans are eligible for at least one income-driven repayment plan.  There are four income-driven repayment plans:  (1) Revised Pay As You Earn Repayment Plan (REPAYE Plan); (2) Pay As You Earn Repayment Plan (PAYE Plan); (3) Income-Based Repayment Plan (IBR Plan); (4) Income-Contingent Repayment Plan (ICR Plan).  For more detailed information visit: https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven.  The PAYE plans are designed to make your student loan debt more manageable by reducing your monthly payment amount.

Furthermore, to help borrowers easily navigate the complexity of student loan repayment options, you can now find the best student loan repayment option in 60 seconds or less.  The U.S. Digital Service and the Department of Education’s Office of Federal Student Aid launched the new StudentLoans.gov/Repay to help students find the best repayment option in five steps or less. It is simple, easy, and fast.

VISIT:

https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven

StudentLoans.gov/Repay

tPay as You Earn (PAYE) plan.

Related Posts