Ad-free. Influence-free. Powered by consumers.
Skip to Main ContentThe payment for your account couldn't be processed or you've canceled your account with us.
Re-activateMark Kantrowitz, publisher of FinAid.org, a Web site devoted to helping students understand and find financial aid, and FastWeb.com, a free scholarship-matching Web site, sees great value in that proposal, which would essentially cut debt payments by a third for participating students.
"This proposal would yield meaningful repayment relief to hundreds of thousands of borrowers whose federal student loan debt exceeds their income," he says, adding that individuals who pursued lower-paid jobs in public service would be among the major beneficiaries.
A social worker with a starting salary of $30,000 and $40,000 in student loans, for instance, would see her monthly payments drop to $114.63 a month from $171.94 a month. Most graduates would end up with monthly payments of less than 7 percent of their adjusted gross income, Kantrowitz says. As in the current program, the new payment limitations would apply to private loans.
Kantrowitz estimates the cost to the federal government is "at most $2 billion over 5 years and probably half that." The White House estimates more: $7.5 billion over 10 years.
But, Kantrowitz notes, the benefit to society from having fewer young people start out their careers with crushing debt and more individuals pursuing needed careers in public service, would make that cost well worthwhile.
"The public benefits when people go into public service jobs," Kantrowiitz says. "As far as forgiveness goes, you can't squeeze blood from a stone. With people whose income in insufficient to repay their debt, what you're essentially doing now is ruining their credit, forcing them to be in repayment for the rest of their lives. You're doing harm to people."
Build & Buy Car Buying Service
Save thousands off MSRP with upfront dealer pricing information and a transparent car buying experience.
Get Ratings on the go and compare
while you shop
