Heard a bunch about student loan forgiveness lately? It does seem to be everywhere, and because so many students are saddled with looming debt, it’s a hot topic for sure. However, there are some major points to examine:
- This applies to federal loans.
- President Obama has just signed an executive order that expands eligibility for Pay As You Earn. An executive order still has to be reviewed by the Senate, and thus is not law yet.
- The program caps the monthly debt payments of eligible borrowers to no more than 10% percent of their monthly income. And if you still have outstanding debt after 20 years, or 10 years if you work in the public sector or for a nonprofit, it will be forgiven.
- The new order would allow borrowers to take advantage of the cap beginning in December 2015.
- This executive action is an expansion of a 2010 law that tied student loan payments to income.
MJW EA & Company LLC has been working to compile resources for our clients regarding student loans and options for both before you borrow and for afterwards. Check out our College and Beyond link on our home page for info and helpful links.