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With just three days until interest rates on subsidized Stafford loans are scheduled to double from 3.4% to 6.8%, Congress should not make college more expensive, either by letting rates permanently double or by making permanent changes that leave students worse off than doing nothing at all. Instead, Congress should freeze interest rates to avoid increasing the cost of college for millions of students and families already struggling to cover rising costs. The Reed/Hagan bill (S.1238) introduced today with more than 30 other senators would freeze rates for one year and pay for itself by closing a tax loophole. It’s scheduled for a Senate vote on July 10.

By contrast, the bill Senators Manchin, Burr, Coburn, Alexander, and King announced they will introduce today would be worse for students than doing nothing at all. It would let rates for subsidized Stafford loans more than double by 2018 and set no limit on how high rates on all new loans could rise.

There has always been a cap on federal student loan interest rates. As we, alongside other organizations that advocate for students and young people, recently wrote to Congress, a rate cap is essential to ensure that student loans remain affordable and that high interest rates don’t deter students from starting or completing college during periods of high and rising rates.

Nevertheless, some have objected to maintaining an interest rate cap, suggesting that the availability of income-driven repayment plans eliminates the need for any cap. But that’s simply not the case.

Still others have claimed that an interest rate cap isn’t necessary because federal consolidation loans would still have a maximum rate of 8.25%. However, the potential to consolidate is not a legitimate substitute for capping how high rates can rise. Consolidation comes with risks, which vary depending on the borrower’s specific circumstances. For example, consolidation can increase the total cost of the loan by lengthening the repayment period, and it can make it harder to qualify for Public Service Loan Forgiveness. We described these and other consolidation risks in our last post.

A recent alternative Democratic proposal would cap rates and keep subsidized loan rates below 6.8%, but rates on unsubsidized loans would be expected to exceed 7% by 2016. Because 82% of undergraduates with subsidized loans also have unsubsidized loans, keeping rates low on one while increasing rates on the other may not reduce costs for low- and moderate-income students, and could even increase them.

The table below compares how four recent long-term proposals compare to the current rates and scheduled rates for undergraduate subsidized Stafford loans over the next decade. Under three of the proposals, rates on subsidized loans would rise sharply—exceeding 7%, more than double the current rate, by 2018. The difference can be substantial. For a student borrowing the maximum allowable in subsidized and unsubsidized loans over four years, the difference in the rates can cost them over $5,000 more if they repay in 10 years, and over $7,000 more if they repay under an income-driven plan (for details, see our recent analysis here).

Projected Rates for Undergraduate Subsidized Stafford Loans

(based on CBO fiscal year projections for 10-year Treasury notes)

 

Years Rates Projected to  Exceed 7% (2013-2023)

Years Rates Projected to  Exceed 8% (2013-2023)

Cap on How High Rates Can Rise (Yes/No)

Scheduled Rate (6.8%)

NONE

NONE

Yes

Current Rate (3.4%)

NONE

NONE

Yes

Coburn/Burr/Alexander

2016-2023

2018-2023

No

Kline/Foxx

2013-2023*

NONE

Yes

Manchin/Burr

2018-2023

NONE

No

Alternative Dem

NONE

NONE

Yes

*Rate is projected to exceed 7% beginning in 2017 and would apply to all loans taken out after July 1, 2013, because under the Kline/Foxx bill, the rates for all loans vary each year throughout the life of the loans.
 

Both today’s students and tomorrow’s deserve affordable student loans, not so-called solutions that let rates double and rise even higher without any upper limit. Instead, current rates should be temporarily frozen so that Congress and the Administration have time to come up with a plan that makes real sense for both students and taxpayers and helps make college affordable for all. Both the Reed/Harkin bill, supported by a majority of the U.S. Senate and the Administration, and the new Reed/Hagan bill, do just that by extending current rates and fully covering the cost by closing unnecessary tax loopholes.

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With just nine days until interest rates on subsidized Stafford loans are scheduled to double from 3.4% to 6.8%, policymakers keep scrambling to come up with a long-term fix. But so far, their long-term proposals – actual and rumored – fall short on the most important measure of all: keeping loans affordable for students, both now and in the future.

The table below uses CBO projections for 10-Yr T-Note yields (fiscal year) to compare how three recent long-term proposals compare to the current rates and scheduled rates for undergraduate subsidized Stafford loans over the next decade. As you can see, rates would rise sharply under all three proposals, increasing the cost of college for millions of students and families already struggling to pay for college.

 

Projected Rates for Undergraduate Subsidized Stafford Loans (2013-2023)

 

Years Rates Projected to  Exceed 7% (2013-2023)

Years Rates Projected to  Exceed 8% (2013-2023)

Cap on How High Rates Can Rise (Yes/No)

Scheduled Rate (6.8%)

NEVER

NEVER

Yes

Current Rate (3.4%)

NEVER

NEVER

Yes

Coburn/Burr/Alexander

2016-2023

2018-2023

No

Kline/Foxx

2013-2023*

NEVER

Yes

Manchin/King/Coburn

2018-2023

NEVER

Uncertain**

*Rate is projected to exceed 7% beginning in 2017 and would apply to all loans taken out after July 1, 2013,  because under the Kline/Foxx bill, the rates for all loans vary each year throughout the life of the loans.
**Media reports on this proposal vary, and the proposal itself has not been made public.

The table shows that in five years or less, projected rates under these long-term proposals would exceed 7%, more than double the current rate. Some conservatives have objected to including any cap on how high rates can rise. Others have suggested that the availability of income-driven repayment plans eliminates the need for an interest rate cap. But that’s simply not the case.

Still others have claimed that an interest rate cap isn’t necessary because federal consolidation loans would still have a maximum rate of 8.25%. They argue that students who borrow when rates are even higher could consolidate into a new loan at 8.25%.

However, the potential to consolidate is not a legitimate substitute for capping how high rates can rise. Consolidation comes with risks, which vary depending on the borrower’s specific circumstances. Among the risks of consolidation:

  • Consolidation costs you more by extending your repayment period: the longer you stretch out your payments, the more interest you pay. Standard consolidation repayment periods range from 10-30 years depending on your debt level.
  • Any accrued but unpaid interest is capitalized (added to the loan principal) when you consolidate.
  • Rates on consolidation loans are rounded up to the nearest 1/8th of one percent of the weighted average of the loans or 8.25%, whichever is lower. This can also add to the cost of your loan.
  • Consolidating prevents you from paying down your highest interest loan first to reduce the average rate and total cost of your remaining debt.
  • The way repayment periods are automatically set in consolidation makes it harder to qualify for Public Service Loan Forgiveness (PSLF). The only payments that count towards the 120 required for PSLF are income-driven or “standard” 10-year payments. But “standard” consolidation repayment periods are longer than 10 years if you have at least $7,500 in debt.
  • If you consolidate a Parent PLUS loan with your own student loans, the resulting consolidation loan will not be eligible for Income Based Repayment or Pay As You Earn.
  • Benefits and rights associated with individual loans are lost in consolidation.

Both today’s students and tomorrow’s deserve affordable student loans, not so-called solutions that let rates double and rise even higher without any upper limit. Congress must not rush to make permanent changes that leave students worse off than doing nothing at all. Instead, current rates should be temporarily frozen so that Congress and the Administration have time to come up with a plan that makes real sense for both students and taxpayers. The Reed/Harkin bill, supported by a majority of the U.S. Senate and the Administration, does just that: extending current rates for two years while fully paying for itself by closing unnecessary tax loopholes.

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Tomorrow or Saturday, the Legislature will vote on the 2013-14 Budget Act. Included in the budget at the behest of the Assembly Speaker, and agreed to by the Senate pro Tempore and the Governor, is a new Middle Class Scholarship Program. Once fully phased in, the program is projected to cost $305 million annually and offer tuition discounts to students with family incomes likely between $80,000 and $150,000.

But California already has a middle class scholarship. The Cal Grant program, the state’s need-based financial aid program, serves students with family incomes up to $83,100 (for a family of four) – well above California’s median income.  Still, many of our most financially needy college students – those with family incomes below the federal poverty line – are either completely un-served or dramatically under-served by the Cal Grant program, despite the common belief that the state is meeting their needs. Less than one-quarter of California’s very low-income students who apply for aid receive a Cal Grant. A major cause is there just isn’t enough money appropriated to the Cal Grant Program to serve all eligible students.

With hundreds of thousands of low- and truly middle-income students facing severe cost barriers, why throw hundreds of millions of dollars at a new program to help students from families with incomes as high as $150,000?  Investing that money in Cal Grants would get a far bigger bang for the buck. Higher income students are already on track to attend and graduate from college, while lower income students face such large financial obstacles that they drop out, graduate in lower numbers, or fail to attend altogether.

The fiscal priorities contained in the budget agreement are disheartening. However, legislation pending in both the Senate and the Assembly would restore recent cuts to already inadequate grants for the lowest income recipients and increase the availability of awards for both low- and middle-income students. Putting more money into the Cal Grant program would go a long way towards better serving middle-income students. And low-income students would be better served, too.

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With interest rates on subsidized Stafford loans scheduled to double to 6.8% on July 1, today the House passed H.R. 1911 (sponsored by Representatives Kline and Foxx). It would permanently change the way interest rates are set and cost student borrowers more than letting rates double as planned. Meanwhile, the Senate is expected to vote soon on S. 953 (sponsored by Senators Reed and Harkin), which freezes current rates for two years. In addition, there are various other proposals, including one from the President.

To help track and compare these proposals, TICAS has developed a handy summary chart.

We’ve also analyzed how several proposals would affect students’ cost of borrowing, based on a traditional-age student who graduates in four years and borrows the maximum amount of subsidized and unsubsidized Stafford loans ($27,000). For each proposal, we compare the costs in a standard 10-year repayment plan and the income-based Pay As You Earn plan.

Here are some highlights from the full analysis:

Costs in the Standard 10-Year Repayment Plan

  • For a student who starts college this fall, the long-term change in the Kline-Foxx bill (H.R. 1911) would actually cost over $1,000 more than if Congress did nothing at all.

• Letting the subsidized loan rate double to 6.8% as scheduled would cost the student almost $4,000 more than leaving the current 3.4% rate in place.

• H.R. 1911 would cost the student over $5,000 more than leaving the current 3.4% rate in place.

  • For a student who starts college five years from now (in 2018), H.R. 1911 would cost the student over $1,800 more than if Congress did nothing and let rates double to 6.8%.

Costs in the Pay As You Earn Plan (income-based payments, 20-year repayment period)

Our findings underscore that interest rates do make a difference in what many students will have to pay even if they are in Pay As You Earn.

  • For a sample student in Pay As You Earn, extending the current 3.4% rate for subsidized loans saves the student a significant amount of money: ranging from almost $3,000 to almost $10,000 depending on the proposal.
  • Under H.R. 1911, this student would pay over $7,000 more in interest compared to an extension of the current rate, and over $2,000 more than if the rates were allowed to double.

Comprehensive reform is needed to keep federal loans affordable, support sensible borrowing, and provide well-targeted debt relief (note that our recent white paper includes such reform). However, with less than six weeks until student loan rates double to 6.8%, none of the current long-term proposals meet these goals. We must protect students now while giving Congress and the Administration time to consider and enact permanent changes that make sense for both students and taxpayers.

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California Governor Jerry Brown today updated his proposed spending plan for 2013-14.  As in his January plan, he proposes no policy changes to the Cal Grant program, a welcome reprieve from recent years’ cuts.  We are also pleased that he is taking more time to consider how best to craft incentives that support cost-effective student success.

However, we remain concerned about the Governor’s proposal to require California community college (CCC) students who need help with college costs to fill out a federal aid application, or FAFSA.

As we’ve said previously, there are real merits to requiring FAFSA completion to receive a Board of Governor (BOG) fee waiver.  The FAFSA is students’ ticket to federal aid, including Pell Grants and federal loans, as well as state Cal Grants, so why not make it the ticket to institutional BOG fee waivers, too?  This would help more CCC students tap into the federal and state aid that many are currently leaving on the table.

Without a doubt, better access to all the aid they’re eligible for would enable students to take more courses per term, speeding up their time to degree and increasing their chance of ultimately earning a degree or transferring – all of which are in line with the Governor’s priorities for higher education.  Improving access to aid means more students need to complete FAFSAs.

However, the reasons why CCC students leave available aid on the table generally boil down to the fact that CCC financial aid offices aren’t sufficiently equipped to help all of their students understand financial aid and file FAFSAs, which can be complicated and time-consuming to complete.  Per-student funding for financial aid administration at the CCCs is just a fraction of what it is at UC or CSU, despite CCC students being just as likely as others to need aid. And systemwide financial aid staffing at the CCCs has already decreased in recent years.

Under the Governor’s proposal, resources for CCC financial aid offices would decrease even further – by millions of dollars statewide in 2014-15, when the FAFSA requirement would be implemented.  That’s because financial aid administrative funding is based on how many BOG fee waivers colleges award, and the Governor presumes that the number of fee waivers awarded will drop once a FAFSA is required. Fewer fee waivers means less administrative funding, which in turn means fewer students will have support to complete the FAFSA and get fee waivers.

In summary, mandating FAFSA completion for BOG fee waivers could help meet the Governor’s goal of increasing timely completion, but without a substantial increase in the level of support for campus financial aid offices, his actual proposal may have the opposite effect.

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We applaud the Department of Education’s recent improvements to the guidance for college net price calculators, which address several of the issues raised in our report last year. If colleges follow the new guidance, net price calculators will be much easier to find, use, and compare.

The new guidance directs schools to make these tools easier to find in several ways:

  • We found some net price calculators buried deep within school websites. The new guidance strongly urges colleges to post their calculators prominently where students and families are likely to look for information on costs and aid, such as on the Financial Aid, Prospective Students, or Tuition and Fees webpages.
  • Other calculators are hard to find because they are not consistently labeled. The guidance makes clear that these tools must be called “net price calculators” and not other names.
  • The Department also instructs colleges to provide direct links to their net price calculators for use in consumer tools such as College Navigator and the new College Scorecard. Previously, some schools provided links to their home page instead.

The new guidance also aims to make the calculators easier to use and their results easier to compare:

  • We found calculators that made it look like the user’s contact information was required to get a net price estimate. The Department’s guidance clarifies that the calculators cannot require contact information and says those questions should be clearly marked as optional.
  • Some calculators misleadingly used outdated cost information or emphasized the cost after subtracting loans as well as grants and scholarships, which is not the “net price.” The new guidance makes clear that the calculators must use the most recent data available and reinforces the importance of the legally required net price figure, which is the cost after grants and scholarships alone. Only by comparing net price to net price can consumers see meaningful differences in what they might have to save, earn, and/or borrow to pay for college.

Our report identifies several other improvements that would make net price calculators much more user-friendly, such as making the user’s “net price” estimate the most prominent figure on the page, limiting the number of detailed questions (especially those that are required), and making it clear which questions are really required.  But the new guidance – if followed – is an important step toward helping prospective college students and their families look beyond intimidating “sticker prices” and start figuring out which schools they might be able to afford.

To view the Department’s updated guidance on net price calculators, visit the Net Price Calculator Information Center and view the recent Dear Colleague Letter. For more information about net price calculators, visit our resource page.

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Both the President’s FY14 Budget and the Comprehensive Student Loan Protection Act, reintroduced in the Senate this week, propose significant changes to federal student loan interest rates. Rather than being set by Congress, interest rates on new student loans would be tied to the U.S. Treasury’s 10-year borrowing rate that year and remain fixed for the life of the loan, even if interest rates dropped substantially. Though not identical in their details, both proposals would lower the interest rates for students and families who borrow this fall, but allow interest rates to rise steeply for those who borrow in the coming years. Based on CBO projections, interest rates for unsubsidized Stafford loans would exceed 6.8% by 2016 and rise above 8% by 2018.

Moreover, both proposals would eliminate the cap on student loan interest rates, which means that actual rates for all types of federal student loans could rise even higher than currently projected. For the first time ever, there would be no limit to how high rates could go. In addition to increasing the costs of loans and college, uncapped interest rates could deter students from enrolling in or completing college, particularly during periods of high and/or rising interest rates.

Some have suggested that an interest rate cap is not necessary if borrowers have access to an income-driven repayment plan, such as Income-Based Repayment (IBR) or Pay As You Earn (PAYE). In IBR, which is widely available, monthly payments are capped at 15% of discretionary income, and after 25 years of qualifying payments any remaining debt is discharged. In PAYE, currently only available to some current students and recent graduates, monthly payments are capped at 10% of discretionary income, and any remaining debt is discharged after 20 years. New borrowers in 2014 will have access to a similar repayment plan. The President’s budget goes a step further by providing access to existing as well as new borrowers starting in 2014. It also prevents the taxation of debt discharged through income-driven plans.

Although these programs can help keep monthly payments manageable, income-driven repayment plans are no substitute for a cap on interest rates.  First, under current law, not all federal loans or loan borrowers are eligible for an income-driven repayment plan. 

For example, to qualify for IBR or PAYE, borrowers must have a relatively high debt-to-income ratio. Second, even borrowers who qualify for IBR or PAYE can have to pay much more in total with higher-interest-rate loans. In income-driven repayment plans, the interest rate can affect both the monthly payment amount as well as the length of time in repayment. For example, a single borrower who enters repayment with $20,000 in debt and starts out making $30,000 a year (AGI increasing 4% a year) ends up paying much more in PAYE with a higher interest rate than a lower interest rate.

  • An interest rate of 6.8% rather than 3.4% would increase the borrower’s total cost by about $12,000.
  • An interest rate of 8.0% rather than 3.4% would increase the borrower’s total cost by about $19,000.

Comprehensive reform is needed to keep federal loans affordable over time, streamline the program, and better target benefits, but these recent proposals miss those marks. There is a better way forward. TICAS’ recent white paper proposes changes that keep loans affordable, simplify loans, and target benefits to those with more financial need. Our proposal includes both a universal interest rate cap and a guarantee that rates for borrowers in repayment will never be too much higher than the rates being offered to current students. As also detailed in our white paper, the benefits of the improved IBR plan should be targeted so that borrowers with very high incomes do not receive substantial forgiveness when they could well afford to pay more. Read our statement about the President’s FY14 Budget and our white paper on improving federal student aid to increase college access and success. 

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As promised in last night’s State of the Union Address, today the Administration unveiled its new College Scorecard. By providing information about colleges’ costs and outcomes in a clear and comparable format, it has the potential to be a game-changer for higher education. We have long touted the importance of the Scorecard and other tools designed to help students and families pick a college, and we applaud the Administration for supporting and promoting a higher education agenda that puts students first.

Overall, the data provided on the Scorecard are what students and families need to better understand their college options. Today’s version of the Scorecard includes some marked improvement over earlier drafts: it is more interactive and now links directly to colleges’ own net price calculators. However, two types of data on the Scorecard are less helpful and even downright misleading:

  • Loan default rates are provided without any context about how many students at the college borrow and are therefore at risk of ever defaulting.  For instance, American River College’s default rate of 27.5% is much higher than the national average of 13.4%. But what consumers can’t tell from the Scorecard is that only 8% of American River College students actually borrow federal loans. The default rate only represents the share of borrowers – not students – who default. Certainly American River should work on improving its default rate. But when 92% of its students never borrowed in the first place, implying that the default rate alone is indicative of student outcomes more generally does a disservice to would-be students.
  • The median borrowing figures provided are for all federal loan borrowers who entered repayment, regardless of whether the student entered repayment after graduating or dropping out after a semester or two. This makes colleges with high drop-out rates look like a good deal, compares apples to oranges, and undermines the value of other outcome information. Here’s an example. The Scorecard shows that the median federal debt of borrowers entering repayment at Grand Canyon University and Duke University (which both primarily grant bachelor’s degrees) is very similar: $9,500 at Grand Canyon and $8,840 at Duke.

Meanwhile, other federal data not reflected on the Scorecard show that these figures represent very different student outcomes. Because 41% of entering first-time, full-time students at Grand Canyon didn’t return for a second year, the low median debt for borrowers entering repayment reflects just one year of loans in many cases.  Indeed, the average federal loan amount for undergraduate borrowers at Grand Canyon in 2010-11 – what they borrowed in just that one year -- is a remarkably similar figure: $9,444. In contrast, all but 3% of entering first-time, full-time students at Duke return for a second year. And the average annual federal loan amount for undergraduate borrowers is $3,751, less than half their median debt at repayment. That makes sense considering 94% of their entering students leave with degrees.

In these cases, bad comparisons are worse than no comparisons.  Fortunately, both of these data problems have simple fixes.  It would be easy for the Department of Education to add the share of students borrowing to the loan default rate box and provide the necessary context for interpreting default rates. For the median borrowing figures, the Department is already taking steps to collect cumulative federal debt at graduation -- which would be an apples-to-apples comparison of students at the same point in their academic trajectory. Until those figures are available, the Scorecard should take the same approach to median borrowing as it already does to earnings information: make clear that federal data aren’t yet available and encourage prospective students to ask the school for more information.

For more about how to improve information for students and families and other ways to increase college affordability and completion, see TICAS’ new white paper (released yesterday): Aligning the Means and the Ends: How to Improve Federal Student Aid and Increase College Access and Success.  

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Today Governor Jerry Brown introduced his proposal for the 2013-14 state budget. His proposal outlines laudable and critical goals for higher education: making the state’s public colleges more affordable; increasing the number of Californians who complete a degree or certificate; decreasing the time it takes to get through school; and improving transfer rates. Importantly, he proposes no policy changes to the Cal Grant program, which serves hundreds of thousands of California students. However, as described in the budget summary, some of the policies he proposes may be at odds with his stated goals.

For instance, the Governor proposes limiting the number of units for which students can receive a state General Fund subsidy (either through appropriations to colleges or financial aid), beginning in 2013-14. Students should be able to take appropriate courses and earn degrees in a timely fashion, and there needs to be a shared responsibility for doing so. But in the Governor’s proposed budget, the responsibility appears to fall primarily on students, and the details on what will be expected of colleges are much less clear. And if the proposal were to be applied retroactively, to students continuing in 2013-14 rather than those newly enrolling for 2013-14, it would only serve to further penalize the many students who have been stalled by widespread college capacity problems.

Similarly, there are merits to requiring a federal aid application for California community college (CCC) students seeking Board of Governor (BOG) fee waivers, particularly with the availability of the state Dream Act application (which we presume would count under this proposal). Unfortunately, the CCC financial aid offices that administer this program are woefully underfunded, so much so that federal and state aid is being left on the table. Without providing additional resources for colleges to support students’ FAFSA completion, fewer students will likely receive BOG waivers – simply because the FAFSA presents a significant hurdle, and one that CCC financial aid offices are not adequately funded to address.

We urge the Legislature to address these potential pitfalls in the coming months by focusing on the goals outlined by the Governor, and ensuring that policies enacted do not have such unintended consequences for students.  

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Starting tomorrow (Friday, December 21), recent college graduates with federal student loans can apply to lower their monthly payments using the Pay As You Earn plan. This new repayment plan has a lower monthly payment cap than the more widely available Income-Based Repayment (IBR) plan. Pay As You Earn also provides forgiveness after 20 years of payments, rather than 25 years in IBR.

As with any repayment plan that allows you to pay less per month, it is possible to pay more in the long run under Pay As Your Earn or IBR due to accumulated interest. But for millions of Americans currently struggling to repay their loans, these plans ensure that payments will be manageable, help prevent delinquency and default, and provide a much-needed light at the end of the tunnel.

Countering the effects of recession

Pay As You Earn is designed to help recent students entering the job market for the first time in today’s tough economy. Only those who took out their first federal loan after September 30, 2007 and had at least one disbursement after September 30, 2011 will qualify.

The negative effects of starting your career in a down economy can last more than a decade. According to a recent study from the Economic Policy Institute:

Research shows that entering the labor market in a severe downturn can lead to reduced earnings, greater earnings instability, and more spells of unemployment over the next 10 to 15 years. […] In short, the labor market consequences of graduating in a bad economy are not just large and negative, but also long-lasting.

Earlier this year we found that two-thirds of the Class of 2011 had loans, and their average debt was $26,600 for a four-year degree. Yet half of recent college graduates are either unemployed or underemployed. Compared to students who enter the job market in better economic times, recent and soon-to-be graduates are likely to face lower earnings and higher unemployment for many years to come.

Helping lower income borrowers

Borrowers with modest incomes, who need help the most, will get significant relief from Pay As You Earn. As we noted in a recent post, a student who graduated in 2012 or later with $26,600 in federal loans and earns $25,000 a year (adjusted gross income) would pay one-third less each month in Pay As You Earn than in the current IBR plan. The same is true for a married borrower with the same debt who just completed a bachelor’s degree, has two children, and earns $45,000.

The Department of Education reports that more than 1.3 million borrowers are already enrolled in IBR, and nearly 90% of them have incomes under $50,000.

Applying made easy

A new electronic form at Studentloans.gov makes it easy to apply online for Pay As You Earn, IBR, and related repayment plans. Borrowers can even ask to be enrolled in whichever income-based plan they qualify for that has the lowest monthly payment.

Together, these plans can help millions of borrowers keep their student loan payments affordable even in tough times.

NOTE:  TICAS and its Project on Student Debt developed the policy proposal that formed the basis of IBR, which recommended forgiveness after 20 years of payments. Dozens of organizations representing students, consumers, colleges, and lenders supported the goals of that proposal. Learn more about IBR and Pay As You Earn at IBRinfo.org.

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