ibusinesslines.com
ibusinesslines.com August 18, 2017


Worries arise over student loan forgiveness program

20 May 2017, 03:23 | Kelvin Horton

But thus far, student loan borrowers have only seen reductions in protections and are facing the loss of certain forgiveness programs that they were relying on. Many teachers, public defenders, Peace Corps workers, and law enforcement officers fit the qualifications. The first "wave" of people who would qualify for loan forgiveness will hit their 10-year mark in October.

"If you have income-based repayment, you don't need Public Service Loan Forgiveness", said Jason Delisle, a resident fellow at the American Enterprise Institute, a conservative think tank.

The program has been shrouded in some uncertainty for months.

Data in the report is based on responses from loan servicers who assist borrowers in rehabilitating their loans from default and enrollment in income-driven repayment plans. "Increasing access to and success in postsecondary education, especially for the most vulnerable members of society, remains a very important goal in the post-recession economy, and the budget should reflect this priority". A public version of the department's budget is expected to be released next week.

But borrower advocates are concerned the new system proposed by DeVos's Department of Education puts borrowers at risk and rolls back progress in achieving consumer protections.

A request for comment from the Education Department was not immediately returned. "It would be the equivalent of pulling the rug out from under us", said Daniel J. Crooks III, a government attorney who is expecting loan forgiveness from the public service program in six years. Student loans, however, are not free money and frequently, the college years go by much quicker than students anticipate.

One woman, Angie, wrote on Facebook, "Do like ordinary people, get a job and pay your debts".

"Too many Americans are facing crushing student loan debt that feels like a millstone around their necks", Merkley said.


Now, according to a rough draft of the budget, President Donald Trump is planning to deprive federal education initiatives of $10.6 billion - and the first program to go up on the chopping block is PSLF.

For instance, the public service loan forgiveness program is set in statute and can not be eliminated unless Congress votes to do so. In court documents, attorneys for the Department of Education suggested that borrowers may not be able to rely on prior notices from their loan servicers about whether they qualify.

"The changes will certainly increase profits for the industry, but will do nothing to tame the high levels of default in the program", said Rohit Chopra, senior fellow at the Consumer Federation of America and former CFPB assistant director.

Additionally, the CFPB estimated that about 80 percent of borrowers who failed to make any payments after "curing" default would have been eligible for a $0 monthly payment on an IDR plan.

Students with federal education loan can enroll in income-driven repayment plans that tie their monthly payments to a percentage of their earnings, so students with little money or those who fall on hard times can manage their payments. Signing up for that repayment plan alone requires submitting information about your income each year - a process which can take weeks and temporarily stop the clock on your 10 years of payments. But the Government Accountability Office has estimated that as many as a quarter of USA workers could qualify based on the definition of eligible jobs.

The Trump administration's proposal does retain one major element of the Obama-era initiative - the eventual launch of a single portal borrowers can use to repay their debts.

The median borrower in the program has more than $60,000 in student debt and nearly 30 percent of them have more than $100,000 in debt, according to a Brookings report.



Other News

Trending Now

Nintendo Switch's Upcoming Game Owlboy is an Acclaimed Platformer
We'll be reporting on all the news from the press events that week, as well as bringing you previews from the show floor. As a surprise end note to the Direct, Nintendo unveiled a trailer for Splatoon 2's single-player campaign .

Chinese, S. Korean officials meet in attempt to fix ties
Rather than a divergence of interests, the great risk to coordination between Trump and Moon is bad chemistry. Ambassador Nikki Haley declared: "You either support North Korea or you don't, but you have to choose".

Can't vilify EVMs by hacking a look-alike machine — EC to AAP
Even if one person feels that his vote is not going to the party he voted for, then the EC should mull over the concern seriously. CPI national secretary Atul Anjan asked. "With this demonstration, it has been proved that EVMs can actually be hacked".

Doctor's surgery is hit by cyber-attack
The ransomware attack has been described as the largest-ever of its kind. Unfortunately, the patch won't help computers that are already infected.

Tehran mayor Qalibaf quits Iran presidential election race, backs conservative Reisi
Hard-liner Ebrahim Raisi will gain votes from Qalibaf's endorsement, but it may not be enough to defeat Rouhani. Iran agreed to limit its enrichment of uranium in exchange for the lifting of some economic sanctions.

Former FBI Director Comey to testify before Senate intel committee
The Senate and House intelligence committees are also probing possible collusion between the Trump campaign and Moscow. He says his memo is not a finding of official misconduct and is not a statement of reasons to justify Comey's firing.

Macron Spent His First Full Day As President In Germany
She is scheduled to give a television interview on Thursday night and an announcement is expected by week's end. In part that's because Berlin is overwhelmingly relieved that it's not Marine Le Pen walking up the red carpet.