U.S. To Contact Borrowers With New Options For Repaying Student Loans

Career College Central summary:

  • Starting next month, the Department of Education will contact borrowers who are struggling to repay their federal loans to make sure they know all the options available to them.
  • The department is planning to send e-mails to those who seem most likely to benefit from the programs, explaining debt-relief plans based on the borrower’s income.
  • Efforts to rein in student debt, now at more than $1.1 trillion, and make college more affordable have been central issues for the Obama administration. It has expanded debt relief for low-income borrowers with a Pay as You Earn program for recent graduates, and simplified enrollment by putting the application online and allowing applicants to import information from their tax return.
  • Once enrolled in a program, low-income borrowers with high debt pay a percentage of their discretionary income every month, and after a certain time period — 20 years in the new program, 25 years in older plans and 10 years for those in public service jobs — the remaining federal debt is forgiven.

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