Jeremy Hobson: President Obama is in Colorado this morning, where he’ll be announcing a plan to make it easier for people to repay their student loans. Recent graduates are having a hard time finding work, and studies show those who can find work are making less than new graduates did just a few years ago.
Marketplace’s Nancy Marshall-Genzer has the details of the President’s plan.
Nancy Marshall-Genzer: Starting next year, low-income borrowers’ student loan payments will be limited to ten percent of their earnings for 20 years. After that, the rest of the loan will be forgiven.
Education Secretary Arne Duncan says the savings will be substantial.
Arne Duncan: We estimate that 1.6 million student loan borrowers will see their monthly payments fall under this plan. And this has the potential to reduce the loan payments of current students as well as new graduates by hundreds of dollars each month.
Borrowers who have loans from two different federal student loan programs will be able to combine them, making one payment a month and shaving a half percent off the interest rate on some of their loans.
Today’s announcement comes as the College Board is releasing a new report on higher education costs. It says average in-state tuition and fees at four-year public colleges are up more than eight percent this year.
In Washington, I’m Nancy Marshall-Genzer for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.