Student Loan Forgiveness
March 24, 2012 by staff
Student Loan Forgiveness, Student loan debt has become greater than credit card debt in the United States and Representative Hansen Clarke (D-Michigan) is doing something about it. He introduced the Student Loan Forgiveness Act to the House of Representatives on March 8 (see video, left) that would make student loans easier to repay. In an article in the March 21st U.S. News & World Report, student loan debt is on its way to exceed $1,000,000,000,000 by the end of 2012.
Clarke feels the debt burden is impeding economic growth by preventing those who obtained degrees to make headway in the labor market. Although going on to higher education increases earning power, student loan debt prevents people from buying houses, cars, or even forging past the poverty level after paying only for necessities and the borrowed money for tuition.
The main aspects of the bill, in summary, are:
10/10 payments – Payment plans would be limited to 10 percent of an individual’s discretionary income to be paid back at a term limit of 120 months.
Interest rate cap – Federal loans would be capped at a 3.4 percent interest rate.
Public service loan forgiveness improvement – Individuals who work in the public sector which offer usually low-paying salaries because of grant or government fund limits would be able to decrease the term of the loan to a maximum of 60 months.
Refinancing private loans – Borrowers who have high-interest, private loans would be eligible for assistance to consolidate or discharge private loans which are typically not protected under federal regulations.
A more detailed look into the Student Loan Forgiveness Act explains issues, qualifications and stipulations concerning long-time loan holders, future borrowers, or the specifics regarding each person’s individual status. Clarke asks for the public’s support to push the Act through as soon as possible.
Visit signon.org for more information and to add your name to a petition supporting the legislation. Clarke suggests calling local, state, and federal representatives such as senators and congressmen as well as using the vast power of social networking to get the word out. The Twitter hashtag is #studentdebthelp.
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