New push to ease student loan repayment
The federal government will streamline the process that borrowers use to get their payments capped at just 15 percent of their salaries.
Jeremy Hobson: President Obama will be in Nevada today talking to students. He's promoting a plan to make it easier for low-income student borrowers to defer their federal loan repayments.
Our Washington Bureau Chief, John Dimsdale, reports.
John Dimsdale: The Income Based Repayment plan caps monthly student loan payments at 15 percent of the graduate's salary. Someone earning $50,000 wouldn't pay more than $625 a month.
The problem is, only 2 or 3 percent of borrowers take advantage of the program.
Arne Duncan: We think part of the challenge has been it's complicated. It's hard.
That's Education Secretary Arne Duncan on a conference call with reporters. He says the application asks for all sorts of income and tax information. By this fall, borrowers will be able to electronically transfer IRS data directly into their online application.
Duncan: Just making the process itself much less complicated, much more simple and hopefully we'll see many more folks take advantage going forward.
The average student loan is around $22,000, says Terry Hartle of the American Council on Education.
Terry Hartle: It's clear the administration is reacting to widespread concerns that some students borrow frightful sums of money to pay for their college education and not surprisingly have difficulty paying it back.
The challenge he says is to get the word out to low-income students that they might be eligible for a break on their loans.
In Washington, I'm John Dimsdale for Marketplace.