Student Debt Forgiveness - 7/9/14
The federal government has taken certain steps to relieve some of America’s student debt burden. President Obama recently announced that he is expanding the Pay as You Earn Repayment Plan, which targets borrowers with low incomes relative to their overall federal student loan debt. The program reduces borrowers’ monthly payments and provides the opportunity for debt forgiveness. According to the U.S. Department of Education, there were 190,000 borrowers enrolled at the end of March. According to the White House, the recent change could render up to 5 million more borrowers eligible over the next year or so.
But according to Edvisors.com, a Las Vegas-based college financial age website, that figure pales in comparison to the 41 million borrowers with federal or private student loans outstanding at the end of March. As reported in the Wall Street Journal, losses among lenders are mounting as more borrowers fall behind on payments. Ten percent of the 4.7 million federal student loan borrowers who began paying back their loans at some point between October 2010 and September 2011 had defaulted by September 30th of 2012 according to Education Department, the sixth consecutive year of rising defaults.