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From Education News: Obama Administration Mulls Graduate Loan Forgiveness Plans

Concerns that President Barack Obama’s budget, which includes graduate school student loan forgiveness, have driven critics to charge that the reforms will produce a greater cost to taxpayers than originally planned.
Allesandra Lanza, in a blog for Student Loan Ranger published in US News and World Report, has discovered a $21 billion shortfall for federal student loan programs. The lack is largely due to a projection of more borrowers using loan forgiveness after 10 to 25 years of of making income-based payments.

As many as 40% of the nation’s federal loan disbursements are for graduate student loans, of which many are more likely to have significant loan amounts forgiven under the income-based repayment plans Pay As You Earn and Public Service Loan Forgiveness, according to the New America Foundation. Dependent undergraduate students can borrow only up to $31,000 in federal student loans, and independent students can borrow as much as $57,500. This means there will likely be no balance after 10 or 20 years of payment unless the borrower has maintained an outstandingly low income over many years.

Read the rest of this story at Education News. 

 

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