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  • Student Loans Debt and the Obama Administration
  • Posted By:
  • Kathy H
  • Posted On:
  • 28-Jun-2016
  • Higher Education in the United States has been the prime concern of the Obama Administration from the time it has taken over. There has been multiple problems facing higher education for students, which have impacted the total economy of the United States, and the Obama Administration has been making all efforts to ensure that maximum students can be educated without facing problems.

    One big issue has been the Student Loan Debt. This loan debt has rapidly increased since 2004 from $350 billion to almost $1.2 trillion. This is an increase which has surpassed home mortgages and other loans, due to the fact that more families and students tend to borrow for higher education. This is just one problem being faced by the Obama Administration where higher education is concerned.

    Changes made by President Obama

    According to the changes made by the Obama Administration there will be no subsidies given to lending institutions which are private, for loans which are backed federally, besides this, those who have borrowed since 2014 will be required to make payments which are based on 10% of their income which is discretionary.

    Borrowers termed as ‘new’ would also be eligible for student loan forgiveness program on qualifying payments after a tine span of 20 years. There will be funding for the minority and the poor and there will also be an increase in the funding of colleges.

    Forgiving Student Loan

    With the help of the Public Service Loan program there are millions of students being free of this loan provided they are eligible for it. The options for this are strict and in case of any default, the student is responsible for any interest accumulated on this loan.

    Some of the qualifications for this loan are that the borrower should have a job on a full-time basis and be able to pay 120 payments of the loan. This can ensure that the balance payment is forgiven. These loans need to be paid on time, that is, not later than a fortnight of the payment tie agreed upon.

    Pay as you Earn Repayment Plan

    There are multiple programs which are helpful to students for the repayment of their loans. This Pay as You Earn is solely based on the income and size of your family. This program has a time span of 10 years based on the income monthly. The factors to consider for this program are

    * Current student loans
    * Expenses and income
    * Status of the existing student loan which includes behind by a few months, good stading, default and more
    * You need to be a new borrower
    * No outstanding balances for the new borrower

    Refinancing of the Existing Loans

    There are a number of states which have been able to enact legislation so that the student loans can be refinanced. These programs are designed in a manner which will require the student to pay less of interest.

    Students who refinance loans which are federal, tend to lose access to the forebearment and deference protections which are built into the federal programs. This forbearance and deferment assist student is stop making any payments if they are going through any hardship economically or even return to school.






 

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