NEW YORK — Repaying a student loan could soon be a little less painful.
Starting this week, anyone with a federal student loan can apply for a program that caps monthly payments based on income, and forgives remaining balances after 25 years. Those choosing to work in public service could have their loans forgiven after just 10 years.
Eligibility for income-based repayment is determined by a person’s income and loan size. A calculator at www.ibrinfo.org can help borrowers determine their eligibility for the plan, which becomes available Wednesday.
Monthly payments would amount to less than 10 percent of income for most of the estimated 1 million people expected to enroll, experts say. Payments would never exceed 15 percent of any income above about $16,000 a year. The new payment option is intended to provide relief for those who earn modest salaries and struggle under the weight of student loans for years on end. By stretching repayment over a longer period, monthly payments are kept at a reasonable portion of income, though most people would not see any savings on the total cost of the loan.
by the associated press
No comments:
Post a Comment