Thursday, September 26, 2013

U.S. to Contact Borrowers With New Options for Repaying Student Loans

Week 4 Article #2 

1. Lewin, Tamar. U.S to Contact Borrowers With New Options for Repaying Student Loans
(2013, September 24). New York Times 

2. Category of Issue: Education

3. Level of Issue: National 

4. This article concerns: 
There is an increase in the number of student loan borrowers who are going into default on their payments. 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.

5. How does this affect families/individuals?
This affects many student loan borrowers because there are a lot of people who could benefit from income-based repayment programs but haven’t signed up, and it is necessary for them to do so before they default on their student loan payments. 

6. What are your views?

There are many student loan borrowers who are sitting with a lot of debt after graduation, that they owe back to the government. As of right now student debt is at $1.1 trillion and there is an effort from the Obama administration to make college affordable for students. There are new programs now being created for low-income student loan borrowers to enroll into such as the Pay as You Earn program for recent grads and a simplified enrollment process such as putting it online and to allow applicants to import information from their tax return. Once you are enrolled into a program, low income borrowers with a lot of debt will pay a percentage of their income every month and after a certain time such as 20 years in the program, 25 years in the older plans and 10 years to those working in public service jobs and the remaining of the debt will be forgiven by the government.
College tuition is very expensive to pay for and after graduation students are piled up with student debt that they have to pay back, so by allowing them to enroll into programs like these will make it a little bit more easier to pay back their loan without defaulting on it. The Department of Education need to make a better effort into contacting those borrowers who will most likely benefit from such programs and they need to explain debt relief plans based on the borrower’s income. I wish that the Department would allow all borrowers to enroll into these programs rather than just the low-income borrowers, but the good thing is that at least they are starting somewhere to offer assistance!

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