According to a fact sheet released by The White House on October 25, President Barack Obama is launching a new plan to lower the cost of paying back federal student loans for millions of borrowers.
Yahoo! News reports, ” The plan, to be implemented by executive authority alone, allows some 1.6 million students to cap their loan payments at 10 percent of their discretionary income starting in 2012. It also forgives the balance of student loans after 20 years of payments. Current law allows students to limit loan payments to 15 percent of income, forgiving debt after 25 years of payments, though few students are aware of this option.
In a related move, the US Department of Education, which now administers all federal education loans, is giving borrowers the option of consolidating federal and private loans at reduced rates.”
FACT SHEET: “Help Americans Manage Student Loan Debt” (released by The White House October 25, 2011)
YouTube video explanation “Reducing Your Student Loan Debt” (uploaded by BarackObamadotcom October 26, 2011)