New Help for Those Struggling with Student Loan Debt

I just caught a headline that starting July 1st, a new program aimed at those low-income earners with outstanding student loan debt will come into effect. The program is the Income Based Repayment, and it will cap student loan payments at a level considered affordable after taking into consideration family size and income. According to the non-profit group the Project on Student Debt, payments will be capped at a level less than 10% of family income. As well, the program will forgive any student loan debt remaining after 25 years, and will forgive some loans in 10 years if the student loan debtor enters public service works.

Will the program apply to existing loans? Yes, existing loans in repayment will be eligible for the program, as well as as ones just starting repayment. Unfortunately, student loans currently in default, Parent PLUS loans, consolidation loans repaying a PLUS loan or private student loans will not apply. The program will be in addition to current forgiveness and forebearance programs. Contact your lender to see if you qualify.

For more information, go to the Project on Student Debt website for an explanation of how the program will work. This is most welcome news for those struggling with student debt, including myself.