For modest earners, relief repaying student loans

[Pirate Smile]

Source: Associated Press

NEW YORK – Repaying a student loan could soon be a little less painful.

Starting this week, anyone with a federal student loan can apply for a program, run by the Department of Education, that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.

Eligibility for income-based repayment (IBR) is determined by a person's income and loan size. A calculator at http://www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.

"It's a way to borrow for college without going to the poor house," said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.

The program stems from the Education Department's College Cost Reduction and Access Act, signed in 2007, which authorized the creation of a new income-based repayment plan for both Federal Family Education Loan (FFEL) and Direct Loan borrowers on all Stafford and graduate PLUS loans.



Read more: http://news.yahoo.com/s/ap/20090629/ap_on_bi_ge/us_student_loan_relief

[realisticphish]

1. Good program

though it really won't help me. I can see it being vital to a LOT of students in the next 5 years, though.

[evlbstrd]

2. It doesn't apply to all student loans.

My daughter is finding that out.

[rvablue]

40. Can you share the details of what you/your daughter discovered? n/t

[evlbstrd]

47. Sure.

It's at this site.
http://www.ibrinfo.org/

[rvablue]

48. Thanks! n/t

[meowomon]

3. Halle freakin lujah! Im a nurse

Thank Goddess for Democrats in Congress.

[liberal N proud]

4. Something needs to be done

If you are not born rich in this country you have two choices, go broke putting your kid through school or send them to the military. The second just isn't a good plan for many.

[Kind of Blue]

5. That's fantastic news! But will not help

me right now. It doesn't go into effect until July 1, 2010 and I'll make my last payment on July 3, 2010. But still, I'm so glad millions of people will not have to go through what most of us have endured these last 25years. It's been rough ride.

[old mark]

6. I went back to college for social work when I ws in my late 40's -

since I graduated, I have had real trouble paying the student loans - I owed $14000 that has grown to over $24000 because of periods when I could not pay due to illness.
I retired at 59 after 2 heart attacks, have only a small pension as income and pay over $300/ momnth of it to Sallie Mae.I was a state employee working in a state hospital for over 7 years till retirement.

I am hoping I can get at least a reduction in this - my wife is on disability for over 10 years and I hate to stick her with the payments if I die first.

I hope this will help.
You are right - the GOP did not give a shit.

mark

[Somawas]

27. It was signed in 2007.

And I, for one, am glad that it was Dim son who signed it. Can't you see right wingers proclaiming how Obama and the Democrats have decided to reward failure and lack of responsibility?

[sazerac]

34. Loan forgivenss

If you are disabled you can get your doctor to sign an application for total student debt forgiveness.

If you have no income or little income after 3 years the loan will be forgiven. In the mean time they might wave your payments. You should look into it.

[old mark]

38. I thought I had done that, but they told me it was not forgiven, and charged me

more money as accumulated interest.

These people have no idea what they are talking about.

I will call them again and try to find out what happened.

mark

[Zech Marquis The 2nd]

7. I believe I qualify for this!

If I can have the balance forgiven after 10 years of public service, sign me up! :bounce:

[humbled_opinion]

42. LOL...

You sure jump soon... You might find yourself in the mountains of Kabul doing your good bit of Public Service...

Look before you leap.

[AlphaCentauri]

8. Income-based repayment of federal student loans widened

Source: AP

The Cost Reduction and Access Act, signed in 2007, authorized a new income-based repayment plan for federal student loans — a plan intended to lighten the heavy load of debt that weighs down some graduates for years on end, making it impossible to get ahead.

This Wednesday, anyone with a federal student loan can apply.

The program caps monthly payments based on income and forgives remaining balances after 25 years.

Those who work in public service jobs could have their loans forgiven after just 10 years.

Eligibility for income-based repayment, known as IBR, is determined by a person’s income and loan size. A calculator at www.ibrinfo.org can help borrowers determine their eligibility for the plan.

"It’s a way to borrow for college without going to the poorhouse," said Lauren Asher, president of the Institute for College Access & Success, a California-based nonprofit that runs the Project on Student Debt.



Read more: http://www.star-telegram.com/804/story/1458802.html

[kingofkings]

9. Is this retroactive?

?

[gtar100]

11. Geezus, I wish!

The years of paying back my loan from 1990 really had me regretting the decision to go to school. From Reagan onward, a higher education became nothing more than another money-making scheme for a bunch shitheads in suits at a bank. Made it clear to me that America cared nothing for its youth or its future, except to cash it all in for a good time. I hope that's changing but the damage has been done for the past couple of generations.

[customerserviceguy]

22. So the shitheads in the bank were the only ones to blame?

How about higher education being a guaranteed jobs program for people in the higher education industry, who themselves had degrees that were otherwise useless in trying to find a "real" job? All they did was pass on that uselessness to the next generation.

When we talk about the housing bubble, scorn is rightfully heaped upon the bankers, but there's a full measure of it for the builders, developers, realtwhores and yes, even the buyers in that market, which was fed by Federally insured loans as well.

I think it's fair to apply the same standards to the education lobby as it is to the housing lobby.

[Fearless]

10. For a high school teacher with 37k+ in debts this could be huge!

:kick:

[Seen the light]

12. About. Damn. Time.

I know what I'll be doing on Wednesday.

[drmeow]

13. I wish there was a better way

to do this. I appreciate the need but I knew someone who bragged about using his student loans to travel to Europe every summer and then got a loan repayment grant - it pissed me off. Also, as someone who went to a public school (back when it was affordable and there were Pell Grants), in part because I didn't want to pay for a private school, I kinda resent people running up student loans for private school educations when they could get as good an education at a lot of public schools (I still ended up with student loans, they were just a lot less than other people I know).

I guess I'm saying I have very mixed feelings about this. I'd much rather see the cost of public universities go down. I'd like to see state's fully fund their public universities (fu Arizona State Legislature!). I'd rather see more Pell Grants again. I'd rather not make the banks rich on the backs of students and then switch that to the taxpayers.

[JDPriestly]

14. For every person who tries to scam the student loan system,

there are many, many more who struggle to repay their loans. Many students pay their loans off faster than required. Allowing repayment according to income is appropriate.

[northernlights]

17. I think they already have increased the Pell grants

and hopefully also the federal student loans. This will help people who couldn't get Pell grants for whatever reason.

I wonder what specific jobs "public service" refers to?

[liberal N proud]

18. I thought using the money for something other than school was tougher

10 year or more back you could borrow the money and do just about anything with it and many did.

But most loans today, they require information from the school before you get through the process and each year you have to apply for your FASFA and all bureaucratic mess.

[drmeow]

28. You had to fill out the FASFA

20 years ago, too (at least I had to in 1990). However I always found that whatever formula they used to determine need set the maximum amount that I could borrow a decent amount higher than what I actually needed. I don't think I ever borrowed the full amount (maybe once). I don't know how much things have changed.

[WriteDown]

21. Yeah, I knew quite a few who bought investment properties...

with their student loans. It was a pretty smart deal because they'd use the student loans to put a down payment on the house and the mortgage payments were then tax deductible. They'd work and used the rent payments to pay their way through school.

[Orrex]

23. How did they pull that off?

My annual income while attending college full-time seldom exceeded $10K, and I had no credit history to speak of. How did these enterprising young investors convince a lender to give them a mortgage? What was their income? Were they full- or part-time students?

I agree that it's a smart strategy when feasible, but I knew no one who was in a position to undertake such investment during college.

[WriteDown]

25. No clue...

I only knew one or two in undergrad. It was more common when I was getting my MBA. Some people worked or interned and made a decent salary. I'm sure some also had co-signers. Looking back, I wish I had been so clever at the time.

[Orrex]

29. Yes indeed

I can see it at the grad level, since you could reasonably have found gainful employment by that time.

But when I was eighteen and working at the dorm sign-in desk for $4.25 an hour, buying a property was the last thing on my horizon! ;)

[joeglow3]

30. Amen!!!

This should be tied to the cost of public education. If someone chooses to attend an expensive private school when they had the option to get the same degree from a public university at half the cost, I don't want to pay that difference. I think we should help as much as we can to the extent the loans equal the cost of a public education. Anything more was a personal choice and you should foot the bill for that.

[Ignis]

31. I hear what you're saying, Doc.

I also chose the public option because I didn't come from a wealthy family and didn't want to spend the rest of my life paying off my education. (Besides, the public universities in CA used to be both amazing and affordable, at the time I was choosing.)

I'd like to see some sort of preference given to loans related to public universities, in the same way that loan debt is being forgiven more quickly if you work for the government.

[drmeow]

45. I hate to make a very sad statement

but I fear those high quality affordable CA educations are a thing of the past :cry: That's also where I got my affordable eduction. My loans actually came from graduate school - also at a very good public university in a large and very good system (New York).

[Ignis]

49. Sad but true.

I was there for the beginning of the end, and it was awful to see departments get slashed, merged, dumbed-down, etc.

I'm a big fan of public education, and I don't believe we should be bailing out kids who took the gamble on private education before we attend to those who wen the public route. It sounds like you agree.

[truedelphi]

15. K & R to keep this afloat so as many will see it as possible.

[Kind of Blue]

19. Hey, Truedelphi!

Disregard my PEM to you :rofl: I was alerting you to something you obviously knew before me!

[truedelphi]

33. I still appreciated the warmth and affection

With which you posted your PM.

(Occassionally PM's are not like that)

[libnnc]

36. Holey Moley I qualify for this

:cry:

THANK YOU

Kick :kick:

[LittleGirl]

16. Parent Loans are not eligible

Which would have helped my sister. She took out Parent loans to help her kids finish college and now, has had her pay cut (at least she still has a job) and can't afford to pay as much each month. She's really hurting now that she's taken a 30% cut in pay. Too bad this wasn't set up to help her too.

[terip64]

20. kick

[benld74]

24. I hope it provides needed assistance,,,

My undergrad loans are long gone. My MBA and Master's loans were rolled into my current mortgage after deducting ALL I could from taxes.

[EnviroBat]

26. If I work for a State University does that count as a "public service" job?

[humbled_opinion]

43. Yeah it does if its

at the Univeristy of Kandahar.

[Wednesdays]

32. K&R

:kick:

[fascisthunter]

35. biggest mistake of my life: Private College Loans

never, ever do the same unless you have a gaurentee that you can repay the loan off fast!

Problem with this is that if you opt out of private college loans, chances are you will not be going to the school you want, but maybe one that you can afford.

[Mz Pip]

37. My son's in the same boat.

8% student loans. It's ridiculous.

[fascisthunter]

39. it's better than variable interest rates

and 8% for me would be nice... don't get me wrong, my loans' interest rates have gone down a bit since the Feds lowered the rates, but still... when inflation hits, I'm done. Oh, and there is no way out of it for me... lot's of sharks but no islands in sight.

[proud2BlibKansan]

41. Awesome

A similar program allowed me to work off my loans by teaching. Reagan did away with that program. Nice to see someting similar coming back.

[KG]

44. unemployement = my relief repaying student loans.

:eyes:

[SharonRB]

46. My daughter graduated 10 years ago and still owes a ton

Would she be eligible for this?

[yurbud]

50. good deal.