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College Debts get lighter
Students, burdened with big college loans, will be very glad to see June end.
Because starting July 1, there’s a new repayment option on federal student loans that will allow some borrowers to reduce their monthly payments.
According to the Project on Student Debt, the new income-based repayment option pegs what you must pay to income and family size – and cuts debts for those in the lower-income brackets.
“For example, a single person earning $30,000 a year with $30,000 in debt could cut her or his standard monthly payment amount in half. All federal loans made to students are eligible for this program, regardless of when they were taken out, from which lender, whether for graduate or undergraduate study," the Project’s web site reports.
The new provision is part of a 2007 law that will be effective next month.
Another part of that law, already in place, wipes out student debt for many borrowers who have full-time careers in public service and who have been repaying the loan for 10 years.
The public service professions that qualify include: military service, public safety and law enforcement, public health, social work, librarians, college faculty and public defenders.
Debts to those borrowers, when they are wiped out, won’t be taxable, FinAid.org says.
Unfortunately, the income-based repayment option is only available for direct federal student loans, not for the federal student loans made to parents and for private student loans.
You can find more details at:
http://projectonstudentdebt.org/july1-2009.vp.html
and at:
http://www.finaid.org/loans/ibr.phtml
Harriet Johnson Brackey, the personal finance writer for the Sun-Sentinel, has been an award-winning business...
Comments
The Federal Government needs to forgive more of this debt. It is virtually impossible to pay it back in this economy.
Posted by: david wayne osedach | June 12, 2009 12:41 PM
Education should be free for all. That's the only way everyone will have an equal chance life.
Though I love capitalism, I think there are a few things that we should not capitalize on. Education, Healthcare and nutrition. Once everyone has equal access to these three basic human needs, the world will be much much better.
Posted by: alex | June 12, 2009 12:49 PM
another enslave the educated scam..........they just simply cant change the corporati based america if they are economically enslaved....its all the same , unless your im the top 3% of the corporatis kids, your education costs will enslave you for life......total scam
Posted by: antibarby | June 12, 2009 3:53 PM
Floridian's complaining about secondary education costs? As a recent UF grad I know that our state government has made it as easy as possible to afford college and I come from a family with very little money. Florida Bright Futures pays 75% in state tuition for a 3.0 HS GPA... any student who doesn't put forth the effort necessary to have a 3.0 in High School, doesn't deserve to have their state government pay for them to flunk out of college. The state will and has been helping students who study hard and perform in the classroom, which provides incentive for high school students to study hard. Everyone can't have everything handed to them for free because it makes it difficult for the hard workers from modest means like myself to distinguish ourselves from those who were not willing to put forth the effort necessary to be successful.
Posted by: JMAN | June 13, 2009 3:20 PM