|Issue of the Day: Relief for Student Loan Suffers|
Published Thursday, July 2nd, 2009
Some relief has finally come to those struggling to pay off those student loans. New rules allow for borrowers to apply the plan to their remaining loan amount as of Wednesday, July 1st. Highlights include an income-based repayment plan that considers income and family size; also borrowers can set their monthly loan payment at 15% of their annual adjusted gross income. Plus, borrowers who make less than $16,245 — poverty level — would not be required to make any payments on their federal loans as long as their income remained at that level. Public Service also offers some relief as well in the form of loan forgiveness after 10 years of service. The Government increased the Pell Grants payouts from $619 to $5,350 — thanks to the Stimulus Act — for the 2009-2010 school year, decreased loan origination fees to 1% next July and cut interest rates from 6% to 5.6%.
The action is a result of several factors not the least of which includes skyrocketing tuition, which has reached $20,000 for a Private school and near $5,000 for public school in 2007. For 45% of Public college students and upwards to 60-75% of Private college students, the rise in tuition has resulted in loans to cover the cost of an education. This has lead to an annual Federal Assistance borrowing of $92,484 million and places the US second in Higher Education spending among developed countries.