Student Loan and Debt News: President Obama to Announce Expansion of College Debt Relief Programs
In an effort to help college graduates facing high loan repayments manage their debts, the president on Monday is expected to announce an expansion of a repayment program,
A White House Official told CNN Money that President Barack Obama's proposed expansion would place a cap on monthly payments for some federal student loans at only 10 percent of the borrower's discretionary income.
Five million borrowers would be able to qualify under the new expansion, which will go into affect in December 2015.
The announcement could expand alternative payment programs such as forgiveness programs, which cancels student loan bills for employees working in the public-sector who have been paying on-time for the past 10 years. Borrowers with low-income status could also have their loans relinquished after making on-time payments for 20 to 25 years.
However, borrowers who accepted loans from private lenders do not qualify for the Pay As You Earn and income-based repayment programs, CNN reported.
In his weekly address on Saturday, President Obama vowed to help recent graduates with mounting student loan bills even if that meant bypassing Congress.
"While Congress decides what it's going to do, I will keep doing whatever I can without Congress to help responsible young people pay off their loans -- including new action I will take this week," the president said.
Democratic Sen. Elizabeth Warren proposed a bill that allows borrowers to refinance their student loans as it would extend the current rates for new borrowers to individuals that have outstanding loans at higher rates. The official also said that Obama will voice his support for the proposal, according to CNN.
The New York Times reported that President Obama was scheduled to make his announcement at 1:45 p.m.
On Tuesday, the president will also lead a discussion on Tumblr regarding student loan debt and other education-related topics.
Subscribe to Latin Post!
Sign up for our free newsletter for the Latest coverage!