On January 25th, the Middle Class Task Force unveiled several initiatives designed to relieve the strain on family budgets, including a cap on student loan payments. A few days later, the President talked about this student loan proposal during his State of the Union address. The President’s words generated a lot of interest and excitement, so we wanted to tell you a little more about our plan.
Over the past three decades, college tuition has grown ten times faster than real median incomes for families with children. So it’s no surprise that about two-thirds of graduates take out loans to pay for college and their average debt is over $23,000. But we didn’t need statistics to understand how challenging it can be to pay for college; the Vice President and other members of the Task Force heard about it directly from students, parents, faculty and administrators when we held meetings at Syracuse University and the University of Missouri-St. Louis.
We are proposing to make federal student loans more affordable by limiting a borrower’s payments to 10 percent of the income he or she has left over after covering basic expenses. Here is an example: The monthly payment for a single borrower earning $30,000 who owes $20,000 in loans would be $115 a month, compared to $228 a month under the standard 10-year repayment plan.
Read More At Link:
http://www.whitehouse.gov/blog/2010/02/15/relief-crushing-student-loan-p...