A new plan has been put into effect to help reduce the $1 trillion debt of student loans held by college graduates.
The plan, currently known as The Loan Forgiveness Program, was supposed to go into effect in 2014. However recent studies published by the College Board put pressure on the government to make this program go into effect next year.
According to the College Board, the total student loan debt has passed $1 trillion, more than the nation’s credit card debt. The Board also estimated that the average college student will graduate with $22,000 worth of debt under his or her name.
“I think it is ridiculous that trying educating yourself and making a decent living comes with such a huge finaical burden,” Michelle Smith, a junior education major, said.
A lot of students feel that student loans are a burden. The Loan Forgiveness program is expected to help out 6 million college graduates.
The program is also lowering the maximum required payment on student loans from 15 percent of discretionary income annually to 10 percent for eligible borrowers.
Under the Student Loan Forgiveness program, the loan period is reduced from 25 years to 20 years.This indicates that if you have been paying your monthly installments on time and without defaulting for the duration of 20 years then the remainder of the student loan will be forgiven by the federal government.
“I guess it’s good to hear that the time to pay it off has been reduced from 25 years to 20,” Ashley Smith, a sophomore business major, said. “It’s still too long in my opinion though.”
The big question now is who will benefit from the student loan forgiveness program.
To be eligible for the student loan forgiveness program, you must be employed full-time in an occupation which would benefit the general public such as nurses, teachers, school counselors, doctors, child welfare workers.
“I will be affected by this program so it is great to know I will have help paying off my debt,” Brittany Smith, a senior early childhood education major, said. “But I believe this program should help everyone because in my opinion graduating from college is serving your community.”
If you are affected by this program, it is said that you will save hundreds of dollars a month that you would be using to pay off your student loans.