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TagsBY BOB HOLT
NEWJERSEYNEWSROOM.COM
President Barack Obama has announced a plan that will give student loan recipients relief from rising tuition fees.
Obama’s plan allows student loan repayments to be capped at 10 percent of income starting in January 2012, two years earlier than the existing plan, according to Reuters.
The Washington Post reports the “pay as you earn” program, may benefit up to 1.6 million borrowers and cut their loan payments by up to 200 dollars a month, according to officials. Debt remaining on the loans will be forgiven after 20 years.
Fox Business reports that the plan has no impact on borrowers with private loans for college, and says Americans owe more on student loans than on credit card debts.
CNN reports that consolidation will be available for borrowers who have loans with the Family Education Loan Program and a loan from the government. They can move into a Direct Loan program, and receive a 0.5 percent interest rate break for a limited time.
Obama is making the changes through executive order, and the changes do not require approval by Congress. The White House says the moves will come at no additional cost to taxpayers. Over 36 million Americans have federal student loan debt, but only 450,000 are currently using the income-based repayment program.
According to CBS News, student loans are the top source of household debt besides home mortgages. Debt from student loans has been found to be a common concern in the Occupy Wall Street campaign.
