Tuesday the Obama Administration announced it is taking steps to increase college affordability by making it easier to manage student loan debt. The “Pay As You Earn” proposal will reduce monthly payments for over 1.5 million current college students and borrowers. Starting in 2014, borrowers can reduce their monthly student loan payments to 10 percent of their discretionary income. The proposal will also allow students to cap their loan payments at 10 percent starting next year, and the plan will forgive the balance of their debt after 20 years of payments. Further, starting this January an estimated 6 million students and recent graduates will be able to consolidate their loans and reduce their interest rates. “In a global economy, putting a college education within reach for every American has never been more important,” President Obama said. “But it’s also never been more expensive. That’s why today we’re taking steps to help nearly 1.6 million Americans lower their monthly student loan payments. Steps like these won’t take the place of the bold action we need from Congress to boost our economy and create jobs, but they will make a difference. And until Congress does act, I will continue to do everything in my power to act on behalf of the American people.”
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