President Obama makes it easier to pay back student loans
The Pay As You Earn Program allows you to pay your student loan debt based on how much money you make. It’s been available to students who take out federal loans for a few years. But now, it goes back even further to loans taken out before the year 2007. And it was not difficult to find people who still have student loan debt.
“When I did get my final bill, it said it’d take me 30-40 years,” said KUSI writer and 2013 Arizona State graduate Andrea Perez. “I’ll be paying this for a very long time, which is kind of scary.”
Perez has more than $100,000 in student loans, and she is not alone. According to the White House, most college graduates leave school with a debt of nearly $30,000.
“Over the last three decades, the average tuition at a public university has more than tripled,” stated Obama. “At the same time, the typical family’s income has gone up just 16%.”
That’s why the expansion of the Pay As You Earn Program to include federal loans taken out before 2007 is of interest to many graduates and some who graduated many years ago, like Iowa State graduate Steven Bruns, who is still paying off his loans more than 25 years later.
“In the grand scheme of things, I have child support; things are not as easy as people may think they are right now. It’s pretty tough out there still – paycheck to paycheck sometimes… 10% would work for me, absolutely.”
Bruns and others can now apply to cap their student loans at 10% of their income.
“If we can mitigate the cost of the interest rates on the back end, and then have more young people rather than paying back loans, buying houses, buying cars, starting businesses, becoming entrepreneurs,” stated Education Secretary ArneDuncann. “We think that’s the right thing to do.”
“I probably have friends that it does affect their monthly income – affects what they can spend on their mortgage, all of that. I’m lucky it’s not that big of a portion of my monthly income,” said one debtor Bri Mitchell.
University of Phoenix graduate Joann Navarro looks at this as a sign of better times ahead.
“Hopefully, when the economy picks up, I’ll be able to get the job I really want and be able to pay off my student loans eventually.”
The problem, some say, with this program? Not enough people know about it and many have trouble applying. So those are two hurdles the government needs to get over before it can all those graduates.