New Budget: An Attempt to Deal With Debt-Forgiveness for Students

NEW BUDGET: AN ATTEMPT TO DEAL WITH DEBT-FORGIVENESS FOR

STUDENTS

Latest budget proposal from The White House includes fresh initiatives to alleviate debt burden of students of America. This step has been taken by The White House, in order to encourage universities to boost up education. There are few other reasons as well behind new initiatives related to debt-forgiveness programs. One of those prominent reasons is that such an initiation would also compel Americans to enroll in a program called ‘Pay As You Earn’. This program is also recognized as income-based repayment. It puts a ceiling on monthly student loan bill of a borrower as a percentage of his income & eventually forgives partial amount of debt.

Until, only those borrowers were entitled for availing benefit under this program, who took loans post October 1, 2007. However, once new budget comes into effect, this clause would undergo modification. According to the modified policy, anyone would be able to enroll under this program irrespective of time related to taking loan. The direct impact of the same would result into making college education more affordable. The White House also stated that it seeks changes in order to ensure that the entire program is well-targeted & also ensure safeguarding against increasing education cost at expensive institutions.

MAIN HIGHLIGHTS OF UPCOMING BUDGET

This move is strategically designed in order to address various concerns related to debt-forgiveness. The federal government backs over 80% of the country’s $1.1 trillion in student debt. Those federal loans which are forgiven by the government, are covered by the tax payers of the nation. At the present date, the program restricts the monthly payment on a loan taken by a borrower to 10% of discretionary income. After 20 years of payments, any debt that is remaining, is being forgiven. For those who are employed under government jobs & are under specific non-profit jobs, debt is being forgiven after 10 years.

Among the new changes, individual borrowers would have to face fresh limits on the amount of debt that could have forgiven. The amount forgiven for those who are employed under public service jobs would be capped at $57,500. Those borrowers that are loaded with debt above $57,500 would require making payments for 25 years.

BENEFITS OF THIS NEW INITIATIVE RELATED TO STUDENT-LOAN FORGIVENESS PROGRAM

To put it into a nutshell, this initiative launched by the new budget is truly commendable. It is a win-win situation as students are able to get rid of their loan in lesser time. In addition, they also get to avail an opportunity to earn some money. Universities receive more applications from students related to admission enrollment. State administration gets to recruit more & more people for state-run programs. To conclude, it is certainly a welcome move as it would deter economy to become stagnant. Earlier non-payment of loan will have serious repercussions on the credit standing of a borrower who has just embarked his career. Now, he will be able to avoid any kind of damage to his credit profile & hence will be able to avail loans to buy vehicles, homes, etc, without much hassle.

CONTACT US

Student Debt Center18459 Pines Boulevard, Suite 532, Pembroke

Pines, FL 33029Fax: (866)746-1986

Toll Free Number: (800)551-7187Email: [email protected]

Website: http://studentdebtcenter.org